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Chapter 4 Strategic Planning In International Marketing

0. Principles of International Marketing 9th Edition. Chapter 4 Strategic Planning In International Marketing. Global Marketing. 0. Globalization reflects a business orientation which believes that: The world is becoming more homogeneous and

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Chapter 4 Strategic Planning In International Marketing

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  1. 0 Principles of International Marketing 9th Edition Chapter 4 Strategic Planning In International Marketing

  2. Global Marketing 0 • Globalization reflects a business orientation which believes that: • The world is becoming more homogeneous and • Distinctions between national markets are not only fading but would eventually disappear.

  3. Exhibit 6.1: Global Marketing Evolution 0

  4. Global Marketing 0 • Globalization drivers • Market factors – Include purchasing power, developed infrastructures, technology, globalization of distribution channels, and cross-border retail alliances. • Cost factors – Involve avoiding cost inefficiencies and duplicated efforts (inefficiencies). • Environmental factors – Include reduced governmental barriers and rapid technological evolution; • Competitive factors – Include rapid product innovation, introduction, distribution, unparalleled human capital.

  5. The Strategic Planning Process 0 • Formal strategic planning contributes to both financial performance as well as non financial objectives such as: • Raising the efficacy (sale-ability) of new product launched. • Reducing the operation cost. • Improving product quality. • Market share performance.

  6. The Strategic Planning Process 0 • Three broad dimensions to be kept in mind while undertaking formal strategic planning: • The potential benefits for the company in the short and long term. • The costs. • The presence of the necessary management resource (thinking minds) to undertake the planning endeavor.

  7. Exhibit 6.4 - Global Strategy Formulation 0

  8. Exhibit 6.5 - Competitive Strategies 0 Cost Focus Differentiation Focus

  9. When should a firm opt -sticking to current portfolio of products, OR-diversifying its portfolios with time?

  10. Exhibit 6.7 - Factors Affecting the Choice between Concentration and Diversification Strategies 0 *Lead time: the time between the initiation and completion of a production process.

  11. The Strategic Planning Process 0 • Segmentation • This approach looks at markets on a global or regional basis, thereby ignoring the political boundaries that otherwise define markets in many cases. • Allows global marketers to take advantage of the benefits of standardization while addressing the unique needs and expectations of a specific target group. • E.g., users of an brandX can be in both India and Pakistan, so for the manufacturers, segmentation is alike.

  12. Exhibit 6.8 - Bases for Global Market Segmentation 0 Bases for InternationalMarket Segmentation Environmental Variables Marketing Management Variables Geographic Variables Political Variables Economic Variables Cultural Variables Product Variables Promotion Variables Price Variables Distribution Variables

  13. The Strategic Planning Process 0 • Challenges of global marketing • Insufficient research and the tendency to over-standardize. • Inflexibility in planning and implementation. • Local resistance in the form of not-invented-here syndrome (NIH), which occurs when country organizations are not part of the planning process, or if adoption is forced on them by headquarters.

  14. The Strategic Planning Process 0 • How to avoid the NIH syndrome • Ensure that local managers participate in the development of global brand marketing strategies. • Encourage local managers to develop ideas for regional or global use. • Maintain a product portfolio that includes local as well as regional and global brands. • Allow local managers control over their marketing budgets so that they can respond to local customer needs and counter global competition.

  15. The Local Company in the Global Environment 0 • The degree and strength of globalization in an industry will determine the pressure that the local marketer will be under. • The extent to which the company’s assets are transferable will determine the opportunity dimension. • Multiple strategies are available to local marketers when global markets and marketers challenge them.

  16. Exhibit 6.10 - Competitive Strategies for Local Companies 0

  17. The Local Company in the Global Environment 0 • The following six-part strategy for success has been proposed: • Create customized products and services. • Develop approaches that overcome key obstacles. • Utilize the latest technology for advantage. • Scale up operations locally, regionally, and globally. • Exploit low-cost labor. • Invest in talent to sustain their growth and expansion.

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