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market development decisions: a standardized international marketing strategy involves offering identical product lines at identical prices through identical distribution systems, supported by identical promotional programmes, in several different countries, the opposite of localized marketing strategies which contain no common elements whatsoever.
country-centred strategy, thus focusing on specific market segments or countries, when it can carve out a niche by responding to whatever local country differences are present. The firm that follows this approach does so at considerable risk to itself from competitors that follow a global strategy. It also misses opportunities for cost savings and scale economies. The purest global strategy would be to concentrate as many activities as possible in one country and to serve markets from this base with a tightly coordinated market offering. As a result of such a strategy, clear advantages may accrue in the rapid attainment of scale and learning thresholds, the sharing of development and commercialization costs and establishing significant if shared positions in international markets. Simple integration, some companies keep their most sophisticated operations at home but contract out other production to low-cost countries.Smaller multinationals seem to favour this strategy, whereby product development and marketing are performed in the home base while production takes place in numerous overseas subsidiaries..
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Product decisions:Exporting the product is sometimes the first and only stage and is sufficient to accomplish the firm’s objectives. Exporting to exploit a technological lead is likely at the early stage of the development of a product because managers are not acutely concerned with production cost. Later on, however, costs may become a concern and other entry modes become more attractive. Firms with very narrow product lines are generally committed to maintaining their lead in a limited, well-defined market. Firms with very broad product lines which exploit technological leads see themselves as comparatively efficient at developing those technological advantages. Because they know that such advantages are perishable, their strategy is usually to make the widest, and presumably the quickest, application of any technological lead they may develop. effect when the costs of serving the market begin to increase and the market then declines or disappears.One way some companies have of beating the crowd is to use their products and services as platforms. The firm might innovate by developing a new product based on existing technology. Interactive Internet based educational programmes is an example of a new technology with an existing product which has entered the new and growing worldwide educational and training market.Innovating on any one dimension requires considerable care but innovation on more than one dimension requires considerable synergy among parts of the company and between the company and outside partners in the wider business system.
market investment decisions: An alternative means of internationalizing the firm is to exploit a strong brand name. In the modern world of easy international movement and communication, brand names can sometimes gain strength without much conscious effort on the part of the firm that owns the name. Strength of a foreign brand name is associated with the fact or illusion of superior or predictable performance., smaller firms have been able to establish a strong presence in international markets through innovative use of the Internet. Provided they have the capability to fulfill orders, small firms can build a corporate brand through the Internet particularly in multiple niche markets abroad.International companies may standardize and centralize their activities by business function; marketing is usually the last to be centralized. Alternatively the company may centralize selected marketing mix elements; product positioning is usually standardized and control over it centralized whereas some freedom over distribution and pricing is often given to subsidiaries. Some firms standardize and centralize decisions by product according to the impact of culture and scale economies.Cheap and efficient communications allow firms to locate various parts of their production and marketing processes in different countries while maintaining close contact.In this world manufacturers gain global scale economies and experience curve benefits in production, distribution, marketing and management through improvements in information and communications; transportation; and manufacturing technologies.
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2.COMPARATIVE ADVANTAGE:
. With this theory, a country may have an absolute advantage in producing both products but, as long as the weaker country has a comparative advantage in the production of one of the products, trade will occur.
Comparative advantage exists in every country, even in situations where the country has a poor reputation in the activity concerned. Indeed, each country can have a comparative advantage in making a certain product even if it is worse at making that product than any other country. This is matter of definition: a country has a comparative advantage where its margin of superiority is greater, or its margin of inferiority smaller.
The comparative advantage concept, especially with exchange rates incorporated, is less restrictive and more general. It also serves the useful purpose of demonstrating the importance of exchange rate movements to the marketing strategies of the firm in international markets. An adverse movement in exchange rates could easily wipe out the benefits of an otherwise excellent international marketing programme. The comparative advantage concept, in particular, leads to a good first approximation in regard to exchange of goods and services between countries.Trade between countries is beneficial for all countries involved if each specializes in those products for which its factors of production, confined to land, labour and capital, make it, compared with other countries, more efficient.
2. Absolute advantage, the trade theory developed by Adam Smith, an eighteenth-century British economist, may arise because of differences in factors such as:
climate, quality of land, natural resource endowments including: labour, capital, technology or entrepreneurship.According to this theory it is sensible for each country to specialize in the product in which it has an absolute advantage and to secure its needs of the products in which it has a disadvantage through foreign trade. It is mere common sense that if one country is very good at making hats and another is very good at making shoes, then total output can be increased by arranging for the first country to concentrate on making hats and the second on making shoes. Then, through trade in both goods, more of each can be consumed in both places. That refers to absolute advantage. Each country is better than the other at making a certain good, and so profits from specialization and trade.The extent of the benefits from specialization and trade will depend, of course, on the prices at which trading takes place. This brings in the concept of ‘opportunity cost’, meaning what a country will have to give up of one product in order to secure another.
C)MINDSET:
Attitudes towards the growth of the firm are determined largely by perceptions of senior management regarding opportunities and barriers to expansion. Many factors influence the manager’s attitude to growth through internationalisation; managerial time and expense which must be devoted to sales, visiting foreign markets and collecting market information. As a result of these search and information gathering activities, the manager is more likely to develop a balanced positive attitude towards internationalization. Indeed, successful internationalization is ulikely to occur without the acquisition of relevant knowledge through a process of information internalization in the firm.
The globalization of business continues to challenge our ability to operate effectively across countries and cultures, which is why a global mindset is an essential professional trait. Professionals with a global mindset leverage all that they know about their culture and the cultures of other people to react to situations in the most productive ways, all without losing sight of who they are. Developing a strong self-awareness has shown to foster a non-judgmental perspective on differences, which is critical to developing a global mindset.uriosity is critical, because we can all find easy ways to be more curious, and curiosity is what leads us to ask questions, which lead to the insights we need to understand the idiosyncrasies of global work.earn about the typical workplace habits, expectations and best practices in other countries and cultures. Build strong intercultural relationships.What has made you successful in a domestic or local context likely won’t help you reach the same level of success on a global scale, which is why learning to adapt your style is often the hardest part of mastering a global mindset.
D)
A) SELECTION COUNTRY MARKETS/REGIONS
International market segmentation means dividing the market regionally for an investigation into customer groups who might merit separate marketing mixes reflecting different product benefits. Decisions regarding three factors assist in the segmentation process: those which relate to the technology embodied in the product, the customer segment served and the function performed .In relation to market size, for some product categories usage is so infrequent that the market can only sustain one of the brands. Because such a brand must appeal to all segments decisions on product positioning, advertising, distribution and pricing are based on an analysis of the entire market.
A differentiated strategy, in contrast means operating in two or more segments using separate marketing approaches for each segment. A differentiated approach can have the effect of enlarging the size of the total market but costs are increased.
Successful segmentation is related to company resources, the type of product, the stage in the life cycle, the degree of homogeneity among buyers and the strategies followed by competitors. The value of segmented markets increase if a number of conditions are present: the company possesses information on a relevant buyer characteristic; marketing efforts can be effectively focused on the chosen segments; and segments are large, profitable and stable.
One of the simpler management approaches to market segmentation is to treat different geographic regions or countries as different market segments. This approach is very common in large market areas such as the United States or the European Union. At a very general level some EU markets may be treated as similar based on language, geographic proximity and level of development.
In advocating an approach based on a geographical form of segmentation provide a link between market grouping and market selection that is dependent on: the levels of economic development, political and cultural factors, size of the firm’s business in a country, the firm’s ownership or distribution pattern in a country, sales growth potential in the country, or the stage of development of the target market. Thet Select the most promising country from that cluster and, assuming favourable results from on-site research, introduce the product.The underlying assumption in this case is that countries of the same region display similar characteristics, e.g. culture, religion. As with the preceding approach, a company proceeds by:selecting a region; thena development level; and then a country within it.
In future market entries, the firm would first consider those within the same development level as the preceding country and then those at different levels of development within the same region.
B) SELECTION OF CUSTOMERS
Strategic approaches to grouping international markets raise a different set of problems.An appropriate system of classifying or grouping markets is an important aspectin clarifying a firm’s understanding of its international operations. The grouping principle may also direct the selection of markets. Prior to a discussion of the possible relationship between market groups and market selection, it is necessary to consider the various techniques for classifying or grouping countries.
There are three reasons why it is important to identify appropriate macro variables to segment international markets: international markets vary from each other with regard to their level of sophistication, separating countries into different categories allows the firm to customize its marketing strategies and may be possible to use a consistent umbrella strategy or positioning across a number of markets.
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Reflecting a consistent positioning world-wide;Benefiting from positive country of origin effect; andFocusing on the product category.By following this approach to the analysis of the Baileys brand it may be noted that there are country markets in different geographic areas that are similar in terms of the required marketing strategy.Using this brand building framework,, country markets are shown in relation to the development of the cream liqueur category and the Bailey’s brand. Different marketing strategies would be appropriate for each of these positions; the appropriate approach to securing trial is very different from that required to build primary demand, build share or maintain leadership.Baileys has a number of core markets some of which are maintenance markets while others are investment markets. In its key maintenance markets such as Australia, Belgium, Switzerland and Denmark, Bailey’s marketing endeavours are focused on increasing consumption frequency and strengthening brand equities to maintain sales volumes. Lastly, in its investment markets such as the United States, the United Kingdom, Germany and Spain, the objective is to increase volume by increasing frequency and encouraging consumers to increase the occasions in which the brand is used.In these markets Baileys is engaged in changing the positioning of the brand from being a traditional special occasions spirit to being a mainstream spirit drink with an emphasis on pleasure for all sociable occasions. By moving from an occasional treat to a mainstream spirit beverage, sales volume increases and younger consumers are recruited thereby providing a cross cultural loyal customer base.the advantage of the counterfeit product. Counterfeits usually occur only where the trademark holder receives relatively high margins, where the brand is international and where the competitive advantage reflects a worldwide interest in acquiring the best in the market, irrespective of origin. In such circumstances brand logos are easily recognizable. The strength of the counterfeited brand logo rather than quality, which is usually inferior, carries the fake. The trademark owner attempts to ensure that the exclusivity of the brand is preserved because that element of the marketing programme is likely to have become the firm’s principal competitive advantage, even superior to the product quality attribute.
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Any company, before committing its resources to venture in the export business, must carefully assess the advantages and disadvantages of exporting into a new market. Whether it is unintentional or a deliberate move companies need to evaluate and carefully assess the advantages and challenges of exporting before committing resources.The reason for your company to consider exporting is quite compelling; the following are few of the major advantages of exporting:
Increased Sales and Profits. Selling goods and services to a market the company never had before boost sales and increases revenues. Additional foreign sales over the long term, once export development costs have been covered, increase overall profitability.
Enhance Domestic Competitiveness. Most companies become competitive in the domestic market before they venture in the international arena. Being competitive in the domestic market helps companies to acquire some strategies that can help them in the international arena.
Gain Global Market Shares. By going international companies will participate in the global market and gain a piece of their share from the huge international marketplace.
Diversification. Selling to multiple markets allows companies to diversify their business and spread their risk. Companies will not be tied to the changes of the business cycle of domestic market or of one specific country.
Lower Per Unit Costs. Capturing an additional foreign market will usually expand production to meet foreign demand. Increased production can often lower per unit costs and lead to greater use of existing capacities.
Compensate for Seasonal Demands. Companies whose products or services are only used at certain seasons domestically may be able to sell their products or services in foreign markets during different seasons.
Create Potential for Company Expansion. Companies who venture into the exporting business usually have to have a presence or representation in the foreign market. This might require additional personnel and thus lead to expansion.
Sell Excess Production Capacity. Companies who have excess production for any reason can probably sell their products in a foreign market and not be forced to give deep discounts or even dispose of their excess production.
Gain New Knowledge and Experience. Going international can yield valuable ideas and information about new technologies, new marketing techniques and foreign competitors. The gains can help a company?s domestic as well as foreign businesses.
Expand Life Cycle of Product. Many products go through various cycles namely introduction, growth, maturity and declining stage that is the end of their usefulness in a specific market. Once the product reaches the final stage, maturity in a given market, the same product can be introduced in a different market where the product was never marketed before.
Exporting Challenges
While the advantages of exporting by far outweigh the disadvantages, small and medium size enterprises especially face some challenges when venturing in the international marketplace.
Extra Costs. Because it takes more time to develop extra markets, and the pay back periods are longer, the up-front costs for developing new promotional materials, allocating personnel to travel and other administrative costs associated to market the product can strain the meager financial resources of small size companies.
Product Modification. When exporting, companies may need to modify their products to meet foreign country safety and security codes, and other import restrictions. At a minimum, modification is often necessary to satisfy the importing country’s labeling or packaging requirements.
Financial Risk. Collections of payments using the methods that are available (open-account, prepayment, consignment, documentary collection and letter of credit) are not only more time-consuming than for domestic sales, but also more complicated. Thus, companies must carefully weigh the financial risk involved in doing international transactions.
Export Licenses and Documentation. Though the trend is toward less export licensing requirements, the fact that some companies have to obtain an export license to export their goods make them less b