Complete Notes of MBA, International Business Lecture Notes , International marketing

International Business Lecture Notes , International marketing

- The research is very important for marketing in their own country , but even more
important foreign markets . This is because in their own country can rely on
a combination of research results and their own intuition (ie , sense of how
people think , how they use their products , and how they will respond to certain
messages). In foreign markets , do not have the same kind of personal familiarity
to markets, and therefore need to compensate with more extensive research .
- The results of this research , then it should be considered in light of what the company can
deliver.

- Make detailed research is expensive , a company would normally only do a detailed investigation
countries believed to be the most promising.

A. Demand Analysis

- The company has to analyze and segment customers. It should clearly identify
Who are the accessible target customers. It should be understood as the country of
culture can affect demand for your product. Consider income levels ,
demographics , education levels , income distribution , urbanization,
consumption patterns . Also, keep in mind the trends in each of these topics. (Eg
How fast are rising income levels ? Is the aging population ? etc)
- Essentially, you want to detect a new demand for their product . Is often
easier to enter emerging markets in saturated markets .
- Determine the current demand (based on data and expert opinion ) .
- Determining the future demand (based on trends ) .
- Determine the latent demand ( demand for products not available at present in the
country).
- Determine responsiveness to marketing.
- Determine the effects of contagion to neighboring countries .
- Determine what adjustments product customers may prefer .
- Determine the bargaining power of the customer. ( The minor or major customers , the
more you will be able to negotiate the sale price )

B. Competitive Analysis

- Identify existing competitors .
- Identify potential competitors.
- Identify close substitutes for their own product.
- Anticipating competitors' responses . Price war ? Calls for government intervention ?

C. How to Collect Data

- Ideally , data should be collected by people who know the industry and the company , and
that have a strong familiarity with the country of study .
- Often , these people are not available , so there is a risk that data is
misinterpreted or misdirected .

- There are many external data sources : household government , other governments ,
international organizations , service organizations , trade associations , databases ,
other companies.

D. Internal company matters

- The company must consider their own skills . How the company
skills they fare in the currency market ?
- What are the transferable skills of the company? If a function key must be
abroad, can benefit the company can be transferred to that place ?
- What is the risk of giving if marketing skills can only be
through a joint venture or licensing ?
- COSTS .

- Can you think of any examples of bad research in foreign markets ? Can you think of
foreign products that failed in our markets ( or markets of their country if
is an international student ) ? Do you think that the foreign company could have avoided
their errors through better research ?

Product Design

- " Product Design " refers to product characteristics . We think of a product
broadly to include the service and warranty items .
- One of the issues that are usually considered is whether to use a standard or to adapt the
product in the local market. This perhaps oversimplifies the question of what
company product to sell in the foreign market , but for the purposes of a General
discussion we will focus on this issue.
- There are some important reasons why a company may want to sell a standardized
product. One is that standardized products usually cost less , because this strategy
advantage of economies of scale . A second reason is that the competence of the company can
be in the product as it is and not in a different product.
- Many companies , however , not the fact adapt their products to local markets
variety of reasons. Often , the adjustments are small, relatively inexpensive and do
not produce the company deviates from its powers. There are many reasons why
products need to be modified for the foreign market. The differences in the products
as a result of the differences between countries.

Environmental differences

- Geography
- Geography , for example , affects how people transport . to
example, trucks in mountainous countries need stronger axles .
- Climate
- For example, does the product need to withstand cold winters ?
- Population Density
- In the densely populated areas products typically have to be more compact . to
example, the fridge has to be lower because the kitchens of people are
smaller.

- The population density can indirectly affect the products well. Eg
smaller refrigerators make their owners less likely to buy food in bulk.
Thus, the population density indirectly affects how food companies
package their products.

Individual Composition

- Income
- Sellers of luxury goods should take into account the number of people with high income
are .
- ( Note that GDP per capita is not necessarily a good measure of this in a .
country , everyone can be on the same income , while another
with the same average income can have a wide range of income levels. )
- age
- Age affects product demand associated with certain stages of human
lifecycle. For example , populations with many children may have different
car needs facing elderly populations .
- Of course, taste also tend to differ between groups of age.
- Education
- The illiterate may require product designs that allow use without reading.
- Educated people tend to be better informed on certain issues.
- Religion
- Some religions impose restrictions on the consumption patterns of individuals or May
influence them.
- Examples include restrictions on alcohol , beef , pork or certain types of clothing .
- Religions may also discourage materialism.

interaction Group
- Formal rules (codified by law or regulation)
- Examples include which side of the road leading to safety standards , and
pollution standards .
- Informal Rules
- The classic example is the QWERTY keyboard , which is slightly different in
some European countries.
- Symbols
- Symbols of a country may make sense in another , or it may mean
something very different.
- For example, yellow symbolizes cowardice apparently Anglo
cultures, but symbolizes royalty in China.
- manners
- The behavior that is acceptable in one country may be unacceptable in another
country. For example , in some cultures may be rude for a pizza - Deliveryperson
to knock on the door .

tastes
- Other differences between countries are difficult to classify , and can only be attributed to
taste differences .

- Examples include :
- North American preferences for sweet foods.
Preferences different countries of different drinks - .

The cost of the adaptation
- Generally , there are plenty of reasons to adapt a product for a local market , but a firm
should also take into account the costs of doing so .
- Certain types of adaptation costs are:
- The research and development expenses
- In some cases , the costs of a new design can be small (eg
Cost of Cadbury to change their proportions of ingredients ) , or may be
substantial .
- The costs of market cultivation
- Some variations of products may require substantially different
- Line Costs
promotion approach .
- A new line of machinery or product may require additional workers
produce the new product.
- Switching costs
- In some cases , companies use the same production line to produce different
product types. However, there are costs associated with
frequent reorganization within a plant . This process is costly , both in terms
of money and time .
- On the other hand , some companies have significantly reduced those costs
through flexible manufacturing processes .
- Input costs
- If the modified product requires a new entry , the costs could rise simply
because the company is buying more expensive inputs .
- (Of course, in some cases, modification of products may reduce
cost of production, if the modified product cheaper inputs used . )

other Considerations
- Trends
- Some of the differences ( such as education and the like ) may change over time.
Others ( such as geography and climate ) do not.
- Niche Markets
- Although most people can be of a type , a company may be able to
to sell a product without alterations to a minority niche.
- For example, a European chocolate producer may choose to sell an unaltered
product in the U.S. (Ie , not to add more sugar) to point to segment
American consumers who prefer less sweet chocolates .

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