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THE MORE YOU CARE, THE STRONGER YOU CAN BE.

THE MORE YOU CARE, THE STRONGER YOU CAN BE. BUDAPESTI GAZDASÁGI FŐISKOLA INTERNATIONAL MARKETING LECTURE- 11 In English 11th May2012 – FRIDAY 0940hr –1110hr (E.F. 7-9) Miklós (Nicholas) SOÓS 0630 265 9638 miklosoos@hotmail.com. somi.

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THE MORE YOU CARE, THE STRONGER YOU CAN BE.

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  1. THE MORE YOU CARE, THE STRONGER YOU CAN BE.

  2. BUDAPESTI GAZDASÁGI FŐISKOLA INTERNATIONAL MARKETING LECTURE- 11 In English 11th May2012 – FRIDAY 0940hr –1110hr (E.F. 7-9) Miklós(Nicholas)SOÓS 0630 265 9638 miklosoos@hotmail.com somi

  3. LECTURE DATES - TIMES - LOCATION RE: Miklós (Nicholas) SOÓS • FEB. 17. 0940-1110 [E.F.13-15] • FEB. 24. 0940-1110 [E.F.13-15] • MARCH 2. 0940-1110 [E.F.13-15] • MARCH 9. 0940-1110 [E.F.13-15] • MARCH 16. VACATION • MARCH 23. VACATION • 5. MARCH 30. 0940-1110 [E.F.13-15] – re. feb.10 • 6. APR. 6. 0940-1110 [E.F.13-15] (guest lect?) • 7. APR. 13. 0940-1110 [E.F.13-15] • 8. APR. 20. 0940-1110 [E.F.13-15] • 9. APR. 27. 0940-1110 [E.F.13-15] • 10. MAY 4. 0940-1110 [E.F.13-15] • 11. MAY 11. 0940-1110 [E.F.13-15] somi

  4. CLASS ATTENDANCE somi

  5. Please ensure that you personally sign the attendance sheet every time you attend a lecture. somi

  6. The visual contents of lectures will be available internally on the following site: K:\Hallgatok\ANGOL\Soós tanár úr (available internally only) somi

  7. SOURCES, REFERENCES – SUGGESTED READINGS The course is NOT based on any specific textbook. The following are recommended. International Marketing, Cateora, P. & Graham, J. (2005) 12th edition, McGraw-Hill Global Marketing, Hollensen, S. (2004) 3rd edition, Prentice Hall International Marketing Strategy, Doole, I. & Lowe, R (2004) 4th edition Thomson International Marketing and Export Management, Albaum G, Prentice Hall London Principles of Marketing, Kotler P et. Al, 2nd European edition, Prentice Hall E. 2003 Principles of Marketing,Jobber D, McGraw-Hill Principles of Marketing, Brassington F, Financial Times Prentice Hall, 2000 Marketing on the Internet: Principles of online marketing, Strauss J & Raymond F, Prentice Hall,1999 Internet sites: www.pmcinc.org/ www.tradeport.org www.FAS.USDA.gov somi

  8. ASSESSMENT METHOD End of year written examination 60% Two (2) ‘mini’ exams of 20 min. duration during unannounced lectures40% somi somi

  9. BGF. INTERNATIONAL MARKETING – MINI TESTS AVERAGE ASSESSMENTS Markscale %No. <45 39 46-50 5 51-55 3 56-60 2 61-65 6 66-70 5 71-75 2 76-80 2 81-85 1 86-90 1 91-95 1 96-100 0 Total no. of students: 67 Class average : 65% Lowest score 0% Highest score: 95% somi

  10. MINI TESTS AVERAGE - RESULTS somi

  11. MINI TEST 1 & 2 - RESULTS somi

  12. FINAL 90 MINUTES EXAMINATION TIMES AND LOCATIONS. • FRIDAY MAY 18TH. 0940 E.F. 13-15 • FRIDAY MAY 25TH. 1000 E.F. 7-9 • FRIDAY JUNE 1ST. 1030 E.ll. 10 Please remember you need to register for the examinations on NEPTUN.

  13. Where we finished last week. somi

  14. INTERNATIONAL PRICE STRATEGY FRAMEWORK • Firm-level factors • Strategic objectives • M.share, profit,costs • 4Ps………… • Inventory level • Foreign price setting • price relation to product line • redesign & price implication • transfer price setting • inflation adjustment • pricing for multinational clients • client-specific pricing • Product-specific factors • Life cycle • Substitutes • Quality, service, delivery • Market-specific factors • Consumers • Government intervention • Distribution channel • Barriers to trade • Environmental factors • Competition • Exchange rate • Inflation rate somi

  15. FACTORS INFUENCING THE SETTING OF INTERNATIONAL PRICES Supplier marketing strategy Distributor’s considerations Trade buyers’ considerations Competitive activity Market environment • Cost of goods • delivered to • distributor’s • warehouse, duty • paid • User/consumer • demand • Supplier credit • Trade margin • requirements • Net profit • requirements • Product suitability • to fit distributor’s • market position & • range policies • Exchange rate • Income levels • Income distribtn • Employment • Interest rate • Inflation • Local distribution • costs • Demographics • Security of • access to market • Government • policies & • attitudes • Price control • Risk factors in • supplying the • market • Supplier reliability • & reputation • Local availability • or delivery lead • time • Suitability to • satisfy user needs • Product quality • Payment terms & • credit • Price • competitiveness • Product’s value • v competitor • Product/brand • loyalty • Competitor • pricing policies • Competitor • market share & • penetration • Distribution • Product • positioning • Comparable • features & benefits • (points of product • differentiation) • Supply capacity – • ability to supply • to meet market • demand • Portfolio mix • Prodt positioning • within co. & mrkt • Communication • support – • advertising & • promotions. • Product branding • Consumers’ • added value • perceptions • Sales volume & • market share goal • Maturity stage of • market – • product life cycle • factors somi

  16. PRICING POLICIES Penetration pricing–if objective is high volume sales and low production cost. Pricing product at its long-term equilibrium price from the start even though it may loose at early stages. Rapid expansion and may deter competitors. Marginal pricing – product price below full cost but above variable cost in selected markets. E.g ‘happy hours’ in bars; ‘early birds’ in disc. Stores. Market-based pricing– priceat a levelwhat someone is willing to pay. Loss leading– offering products / services at below cost – attracting initial customers. Skimming– charging high price for a short time – relatively unusual, used where product life-cyle is short e.g. high-technology products Somi

  17. PRICE ELASTICITY OF DEMAND (PED) • Price elasticity of demand (PED) describes the way in which the demand for a product responds to a change in its price. • Price elastic– if small change in price leads to a large change in demand the product is said to be price elastic. (e.g. refrigerators, cars, computers) • Price inelastic – if the demand for a product shows little response to changes in price, the product is said to be price inelastic. (e.g. bread, medicine) Somi

  18. CALCULATING THE PED (PRICE ELASTICITY OF DEMAND) Percentage change in demand PED = Percentage change in price • Calculate percentage change in price. • If price changed from 320 to 280 - %-age change = - 12.5% • Calculate percentage change in demand. • If original volume sold was 80 units and new sales volume is 100 units • %-age change = 25% 3. Calculate PED = 25 = - 2.0 - 12.5 Somi

  19. ADAPT OR STANDARDISE ? is the question Should a firm modify and adapt products when offering them on a foreign markets OR offer a standardised product to all markets? A frequently debated issue in International Marketing. STANDARDASATION is offering a common product on a national, regional or on a worldwide basis ADAPTATION involves making appropriate changes in a product to match the requirements of customers in a specific market. somi

  20. IMPORTANT FACTORS RELATING TO STANDARDISATION & ADAPTATION? • economies of scale • R&D cost reduction • lower stock level • standard technology • consumer mobility • homogeneous markets • global communication channels • higher level of education somi

  21. FACTORS THAT ENCOURAGE STANDARDASATION ADAPTATION • variation in consumer preferences • different conditions of use • variation in ability to afford… • government influence • legal requirements • different tastes & behaviour • physical environment • lack of adequate support system • high cost of adaptation • nature of the product • economies of scale (manufactr) • economies in R & D • economies in marketing • economic integration between countries • competition somi

  22. THE ESSENTIAL ASPECT TO REMEMBER ABOUT ADAPTATION-STANDARDASATION If we are faced with the decision between being fully standardized or fully adapted, how do we decide ……? The Marketing Mix (4Ps+ 3Ps) is the tool for determining the degree of standardization possible, according to the degree of international variation. somi 22-40

  23. GREEN MARKETING Green marketing is the marketing of products that are presumed to be environmentally safe. Activities include: • product modification • changes to the production process • packaging changes • modifying advertising somi

  24. GREEN MARKETING 1. Origin: 1970 To increase people’s awareness about importance of environmental preservation (ecological disasters) Consumers are becoming environmentally conscious as they buy, consume Some companies are managing to develop and market green products somi

  25. GREEN MARKETING 2. PURCHASING BEHAVIOUR OF A TYPICAL GREEN CONSUMER Looks for products packaged in recyclable materials Does not buy products that are excessively packaged Is attracted to products perceived as environmentally friendly Looks for products made from recycled or reusable materials Chooses products that do not contain toxic materials Avoids buying anything packaged in foam somi

  26. GREEN MARKETING 3. GREEN SEGMENTS Green Leaders Green followers Middle of the spectrum Grousers Nonenvironmentalists somi 26-40

  27. GREEN MARKETING 4. GREEN COMPANY ATTITUDES • input, output, design, manufacture, delivery must be considered • typology • ignore the green • pass as green • genuine green • pro-green somi

  28. GREEN MARKETING 5. 4 Rs of long-term corporate commitment Rethinkingof consumption to conserve natural resources Reuseproducts and packaging Refusal to buy products that misuse scarce resources Recycle packaging somi

  29. GREEN MARKETING 6. GREEN MIX • Position: reprofile to reflect new consumer values • Product: design new products • Packaging: minimal, reuse • Price: long-term competitive • Place: proximity to recycling centers • Promotion: education and information somi

  30. Let us now have an overview of the more important aspects of International Marketing. 30-40

  31. INTERNATIONAL MARKETING Why are we concerned with culture? The marketing significance of culture is that it affects buyer behaviour “Ways of living, built up by a group of human beings” A set of standards and beliefs shared by a group of people, which helps an individual decide what is ‘right’, what can be ok, how to feel, what to do and how to go about it….. “The way we do things around here” The sum of conscious and unconscious values, ideas, attitudes and symbols that shape human behaviour and that are transmitted from one generation to the next…. “The collective programming of the mind that distinguishes the members of one category of people from those of another” So…. What is culture ???? somi 31-40

  32. Social/cultural Language, religion, values, social organisation, material culture Legal Local domestic laws International law Home domestic laws ECONOMIC Developed economy Emerging economy Less developed econ Currency movements S L E Ecology rainfall, temperature, seasons Environmentalinfluences on international marketing T P Technological Satelite communctn Internet WWW The electronic superhighway Political Operational restrictions Discriminatory restrictions Physical actions DOOLE & LOWE somi

  33. MAJOR WAYS IN WHICH COMPANIES FIRST ENTER INTERNATIONAL MARKETS 1 Export 5 joint venture 4 manufacturing 2 Licensing 3 Establish sales offices somi 33-40

  34. MARKET ENTRY 1 EXPORTING TO FOREIGN MARKETS • Indirect export: • domestic based export merchant sells abroad • Direct export: • domestic based export department, • foreign based distributors, or agents • overseas sales branch or subsidiary • Exporting seems the simplest way of entering a foreign market. • In reality an export order initiates a series of problems not typically faced before. For example: • application for export license from government • payment arrangement – how will sales be paid for • currency • banking arrangements • shipment and associated paper-work These and other complications might give the sales manager second thought despite the possible benefits.However the benefit of going international this way is that risk can be controlled. One person could handle it and would have little effect on organizational structure. somi 34-40

  35. THE FEATURES COMMONLY ASSOCIATED WITH THE TOP GLOBAL BRANDS Quelch Strong in home market Corporate name 7 Geographical/balance in sales Product category focus Consumers value the country-of-origin Addresses similar consumer needs Consistent positioning somi 35-40

  36. FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Target Country Environmental Factors Target Country Produc-tion Factors Home Country Factors Target Country Market Factors Foreign Market Entry Mode Decision Company Resource/ Commitment Factors Company Product Factors Internal Factors somi 36-40

  37. International marketing research primary data collection pitfalls…. Beware of: • Degree of literacy • Quality of mail and phone service • Available travel facilities • Cultural norm • Mailing list (adequacy and reliability) • Internet availability • Sampling frames (availability and reliability) Somi 37-40

  38. EQUIVALENCES • Construct equivalence – concerned with whether both researcher and the subject of the research view a particular phenomenon or concept in the same way. E.g. beauty, youth, wealth.. • functional equivalence – e.g. Asian shopping (servants) v europe • conceptual equivalence – e.g. meaning of ‘reliability’ • temporal equivalence – e.g. gift-giving seasons • market structure equivalence – e.g. compare Vietnam & Australia • Measurement equivalence – methods used by the researcher to collect and categorise information. Ensure to measure the same phenomenon between different overseas markets – it is necessary to ensure gradation translation and scale equivalence. • Sample equivalence – due to social, cultural, economic and political differences there are unique problems in international marketing which are not found in domestic marketing Somi 38-40

  39. I WISH EACH AND EVERY ONE OF YOU HAPPINESS AND SUCCESS IN YOUR PRIVATE AND PROFESSIONAL LIFE DON’T FORGET THERE IS ALWAYS A BETTER WAY! FIND IT! somi

  40. INDECISION IS THE THIEF OF OPPORTUNITY

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