International Marketing

Why has international marketing grown so much in recent decades? 

Global marketing reaches customers, markets and advertising beyond the borders of domestic region. The more a culture spreads, the more its products do. Since traveling is a lot easier as it used to be, people from different cultures visit different countries. Better communication, transportation and freer international markets are signs of globalization. These aspects lacked in the past and while it used to be risky, international marketing is in many cases a necessity for businesses.




 What are some of the factors that has allowed this to happen more easily now than in the past?

Improved communications, transportation and businesses that are too big for their own market.

Identify five reasons why companies may decide to sell their product or service in foreign markets.

Home markets may be too saturated, meaning that the product is already maximized in given market and there is no more space to sell it anymore.

Foreign markets also offer potential profits while it still emerges, this result in rapid sales at low costs.
Spreading risks to different places.
Poor trading conditions may contribute to market globalization.




What considerations must a company have in these areas when undertaking international marketing?

Ø     Political differences
Changes in the government or political instabilities, like riots or terrorist activity, increase the risk of business failure. For example civirl wars in Nepal, Sri Lanka and Sudan dramatically decreased businesses.
 

Ø     Economic differences
One must take in account the GDP as well as the rates of taxes, age structure of population and interest rates. The GDP vary from country to place to place, like Luxembourg that has GDP of $78 559 and Burundi that stands on $160.
 

Ø     Social differences
Products to be sold are also effected by cultures that also include the importance of marriage and the role of women in the society. For example, IKEA's advertisements that had a happy women in nicely designed kitched in a European country, lacked the woman in the picture in an Arabic country.
 

Ø     Legal differences
Legal differences have huge impact of foreign businesses and affect them in many key ways. For example: product safety and labeling are much stricter in European Union than in America, children under the age of 12 cannot be directly advertised to, guns are legally sold in the USA but are illegal in other countries.
           
Ø     Cultural differences
Unrecognized cultural differences may have crucial impact. While laws are written down, traditions and culture are hard to measure. If a business doesn't recognise , for example, the roles of women in the society, uses an unfortunate word in its translation or uses different colors (ex. in far East, white is a mourning color), the business will fail.  

Ø     Differences in business practices
Setting up a business, the formalities and paperwork that come with it take different amount of time in different parts of the world. For example, this process may take few days in the UK but may take up to a year in Sierra Leone.

 

Source: Business and Managemrnt for the IB Diploma by Peter Stimpson and Alex Smith
              http://www.helium.com/items/1010632-political-risks-in-international-trade

Distribution Arrangements

Distribution is an important part of business's success, since the product must also be present when it needs to be sold. The types of distribution are intensive, selective, exclusive, integrated.

Intensive Distribution

Advantages
This type of distribution takes advantage of the intensity of the product distribution. Businesses are trying to get as many retailers and shelf space as possible. The advantage is that wherever people go, they will see the product and therefore to be reminded to buy it.

Products that are most likely effected
This distribution concerns mainly everyday products that have to be routinely replaced. For example, soap is made in a factory but a common brand can be found in any grocery, retailer store like Walmart, gas stations or drug store. Among items that use intensive distribution belong chewing gums, cigarets, soaps, shampoos, deodorants and soft drinks.

Issues that must be considered
Retailers may give little shelfspace to the product, don't advertise it or make price too high.

Things to be considered about choosing a channel partner

Selective Distribution

Advantages 
Selective distribution means that a product is sold only to some retailers covering specific geographical area. Fewer intermediaries means less money spent for retailers.
 
Products that are most likely effected
Few retailers carry specific product, these are usually of specific brand or designer products.
 
Issues that must be considered
Since only few retailers in the same geographical area are selling this product, manufacturer must consider money issue such as having higher prices and how to make people come to the store where his product is sold.

Things to be considered about choosing a channel partner

Exclusive Distribution

Advantages
In exclusive distribution manufacturer and one specific retailer make an agreement about selling the product. This retailer covers specific area and since this product is most cases special (and expensive) customer service is extra good.
 
Products that are most likely effected
As mentioned before, expensive products usually use this type of distribution. New technologies are very common to distribute its products in this way, for example Apple has agreement with AT&T to sell iPhones.

Issues that must be considered
Since only one retailer sells the product, the manufacturer has to get his money back. Also, the product is expensive and its manufacturing costs tend to be more expensive too. The final price of the product must be high enough to cover these costs yet appealing enough to the people.

Things to be considered about choosing a channel partner

Integrated Distribution
Advantages


Products that are most likely effected

Issues that must be considered

Things to be considered about choosing a channel partner

The Promotional Mix

How would the promotional mix change at different stages of the product life cycle?

Promotional Mix: (citing Mr. Dougherty's definition) is the combination of promotional techniques that a firm uses to communicate the benefits of its product to customers.

PLC: As product enters the market, it goes through various stages. This time period is called product life cycle (PLC) and consists of the Introduction, Growth, Maturity, Decline. The goal of businesses is to sell as much product as possible and therefore has its PLC as long as possible. In order to this, people use extending strategies to prolong maturity or limit decline.

 

Introduction
During this stage, company is trying to establish a customer base, which is crucial for the success of the product. For the sake of good impression and popularity, importance is given especially to advertising that undergoes many tests. Also because the product not popular yeat and lot of money is put into its introduction, the company's profit is negative.

Growth
In this stage, the product is well known. The profits starts to increase, but so does competition. Therefore, the owner starts to focus on brand preference and how to please the customers. Because of the increasing competition and the desire to keep customer's patterns in your business, you must invest money into advertising, which causes the profit to go down at the end of this stage.

Maturity
At this stage, product is very popular and the competition is huge. This leads to decline of product life and therefore most businesses try to extend the maturity of product. Mostly loyal customers buy this product and the businesses start to rely on promotion heavily. They offer loyalty based promotions such as membership cards and also care more about the placement of the product.Businesses encourage retailers to give more shelves to their product than the competitors.

Decline
During decline stage, product's sales go decrease due to unfavorable economy, changed customer's taste or may be also as a result of technological advancements. In this case it depends on the business's strategy. They can keep the product but reduce its cost and find new use to make it more attractive to the customers. 
 They can also sell this product as a very low price to the loyal customers until the profit is zero or discontinue the product completely by selling it to competitor's who want to continue this product. Another option is finding a successor of the product.






Sources:
http://notesdesk.com/notes/marketing/product-life-cycle-plc/

Case Studies in Promotional Marketing

Case studies are taken from this website: http://www.aptcoweb.com/news/casestudies.htm


Museum gets huge membership boost

Since museums are centers of education, it can be said that memberships are mainly aimed to attract people who either want to or have to get educated, for example students and families with kids.
As a promotion they used scratch-off cards with possible prices and therefore to "play the game". This type of technique is called the Game Technique and it is effective because it, in a way, gets the target addicted to the possibility of winning.


AMC butters up sports fans with popcorn offer

In the hometown of AMC, Kansas City, this company decided to attract the home entertained couch potatoes. Because many of these people are enjoying the football season, AMC decided to give away 10,000 key chains that, if presented at the cinema, enables the owner one free popcorn. This raised AMC's customers by 40%. This type of promotion was targeted at sport fans and home-entertained people and was very successful because people love the sense of getting free stuff (in reality they had to pay for the ticket).


Nike Incentive Program Boosts Attendance

Nike employs its workers all around the world and loosing them would mean a huge loss to the company. To improve the attendance of the workers, Nike created a one year plan, giving out specialized mugs particular to each quarter of the year and given to the workers with perfect attendance. This created a competition between workers and the desire to get the different mugs and other accessories that Nike gave out. At the end of the campaign all the Nike facilities reported perfect and improved attendance by over 200%.


Unexpected product works for Fitness Center

Usually fitness centers give out sport related gifts such as water bottles, sporting bags or towels. However, APTCO worker realized that the people attending fitness centers already have their own items of this nature. Some of them carry/wear them but most of them don't. Therefore she decided to give out a practical gift, an umbrella with the company logo. This gift attracts people who go to or want to start going to a fitness center. It is effective because umbrellas are always needed, since they are easy to use and the company logo will be therefore seen by all the people passing by the umbrella owner.

Types of Advertising Techniques

Price Appeal
-consumers will get more for less money
- This is beneficial because people are more attracted to cheaper things

Testimonial

- shows a famous person in the advertistment how they endorse the product

-This way of advertising attracts many people. It makes them think that if the sucessful famous people can use that product, then it's very likely to be good. In this particular case of Pepsi, 3 famous singers are rewarded with Pepsi after an idirect fight.

http://www.youtube.com/watch?v=W7jkygJ_QNo

Sex Appeal
-This type of advertising promotes the enhance owner's sexual attractiveness
- Sex appeal is one of the most used type of advertising because good looks are one of the most desired wishes in people

Logo
-Identifies product with a symbol
- If the logo becomes popular, it becomes identity for 'cool'. Therefore people want to buy it more because thy want to keep up with the style.







Wit and Humor
-Attracts customers by making them laugh with way of communication.
-It's a beneficial way of advertising because it sets positive mood for the customers and make them feel that this product will make them feel happy.

- http://www.youtube.com/watch?v=Z_hwMtG2xCs






Name Calling:
- Comparing products in a way that shows one product as superior to the others
- When the consumers see two products compared and are given reasons why one is better than the other one, they will want to buy it more.

 

Facts and Figures

- Includes statistics and objectives about the product.

- Advertisers would advertise details that are appealing to the customers and that would, in comparison with other brand, make this product superior

 

Emotional Appeal

-Uses viewers emotions for the purpose of supporting their case/ buying their product. Example of this are happyness, sorrow or patriotism

- This way people are psychologically pressured to buy/ support product or service. Most useful emotion is probably pity the advertistments show, as in the Stop Animal Cruelty campaign, that gives viewers sense of "you can help these poor anymals, if you want to" and makes them feel guilty if they don't.

http://www.youtube.com/watch?v=9gspElv1yvc





Slogan
-connects product with an idea or a thought

-this is beneficial for the business because, like in the Nokia case, people connect the product with the slogan. In this case slogan connects people, which is positive think and therefore people will think positively every time they hear about this product or think of the product more often when they hear the slogan or the phrase about connecting people











Confusion
- At first it gains consumers attention by confusing them and then concludes it by bringing up the point
- Confusion pretty much traps the thoughts and attention of the viewer. Once they are too interested to stop watching the commericial, the ad gets to the point.

https://www.blogger.com/blogger.g?blogID=2669362492757507440#editor/target=post;postID=979753033921827530

Informative Advertising

Definition: Type of advertising that provides consumers with information about service/ product and give it some official credibility.

Examples:

1. Alcoholic beverages that say "Don't drink and drive"
2. Cigarette boxes saying " Smoking Kills"
3. Twinkies that come in 100 calorie pack and show it on their box

                                       
 How does this advertising work?

This advertising informs people about the product they are buying. Specifically, it brings up details that are most attractive to them. For example, Twinkie Bites are type of candy. Candy is sugary and sugary stuff have lot of calories and make people fat. In today's society, being overweight is one of the biggest problems, whether they are health related or self-image problems. At the same time, however, people love these sugary calorie-filled foods, so the best way to balance the two aspects is to make food with not as many calories. In this case, Twinkie Bites became the smaller version of full sized Twinkies with only 100 calories instead of 146 calories in a Banana Twinkie, 150 calories in the classic Twinkie, 281 calories in a Strawberry Glazed Twinkie and 425 calories in a Fried Twinkie. In other words, Twinkies will not get limited as much because the advertising lets the specific "dieting" social group know that it is OK to still eat Twinkies.




Limitations of this advertising?

In the case of cigarettes, alcohol and other legal harmful substances loved by people, products are required by law to advertise their flaws. for example, cigarettes say that they cause lung cancer, that they kill and that they are harmful also to non smokers. These informative advertising serve to make people dislike the product and therefore they may stop buying it.







Which businesses would do this?

Food and drinks all include the informative aspect. Also, centers of education, such as zoos may advertise fun facts about animals and colleges advertise the graduation rates. Pretty much any service/ product that includes "attractive" facts will use this type of advertising.

Synovate

Who they are and what do they do?

Synovate was an organisation providing research services. Since it officially became part of Ipsos in 2011, the specialities of this organization are advertising, marketing, public affairs research, media, customer loyalty and survey management.


Where are they located?

Ipsos is now located in 84 countries all around the world. The headquarters is located in London, UK.




History of Synovate:

Synovate was founded in 1994 as AMI consulting and was part of the Aegis Group plc (media and digital marketing communications group). It was formed of multiple smaller market research firms and thus had more divisions including Synovate Healthcare, Synovate Customer Experience, Synovate Censydiam and Motoresearch. In 2009 it had 5,968 employees and took the sixth place on "Top 10 of the Market Research Sector 2006", ahead of its future parent Ipsos (seventh place). In 2011 Ipsos bought out Synovate for more than half a billion pounds and the two integrated in early 2012. Nowadays, Synovate is part of Ipsos and its services are therefore found on their website.


What are their methods?

Ipsos researchers analyze potential market trends, test products and advertising, "help build long term relationships with customers", study public and measure public opinion worldwide. All this happens thanks to their method of analyzing, observing and asking people the "right questions" which consist of people's expectations, desires and opinions. One method to do this is an online survey where people get paid.
 

 

 

 

Sources:

http://en.wikipedia.org/wiki/Synovate

http://www.ipsos.com/Experts

http://sk.linkedin.com/company/synovate