Published on September 16, 2013
B.Moghimi@yahoo.co.uk 2 Professor: Bahman Moghimi Doctor of Business Administration M.Sc. Of “Industrial Marketing & e-Commerce” Session Two, Chapter 1 University of Georgia
1. Give examples of needs, wants, and demands for Nestlé customers 2. What are the implications of each for Nestlé’s practices? 3. Describe in detail all the facets of Nestlé’s product. What is being exchanged in a Nestlé transaction? 4. Nestlé is B2C, B2B and B2G! Explain how it works?! 5. What is Golacalization in Nestlé? 6. Is Nestlé likely to continue being successful in building customer relationships? Why or why not? B.Moghimi@yahoo.co.uk 4 Class Case
International marketing International marketing is the export, franchising, joint venture or full direct entry of a marketing organization into another country. This can be achieved by exporting a company's product into another location, entry through a joint venture with another firm in the target country, or foreign direct investment into the target country. Internationalization and international marketing meets the needs of selected foreign countries where a company's value can be exported and there is inter-firm and firm learning, optimization and efficiency in economies of scale and scope.5 B.Moghimi@yahoo.co.uk
International marketing (cont) Domestic marketing is concerned with the marketing practices within a researcher’s or marketer’s home country. From the perspective of domestic marketing, marketing methods used outside the home market are foreign marketing. Some marketing textbooks differentiate international marketing from global marketing because international marketing in its literal sense signifies marketing between nations (inter means between).The word international may thus imply that a firm is not a corporate citizen of the world but rather operates from a home base. For those authors, global or world marketing is the preferred term, since nothing is foreign or domestic about the world market and global opportunities 6 B.Moghimi@yahoo.co.uk
Domestic marketing V.S. International marketing Scope – The scope of domestic marketing is limited and will eventually dry up. On the other end, international marketing has endless opportunities and scope. Benefits – As is obvious, the benefits in domestic marketing are less than in international marketing. Furthermore, there is an added incentive of foreign currency that is important from the point of view of the home country as well. Sharing of technology – Domestic marketing is limited in the use of technology whereas international marketing allows use and sharing of latest technologies. Political relations – Domestic marketing has nothing to do with political relations whereas international marketing leads to improvement in political relations between countries and also increased level of cooperation as a result. Barriers – In domestic marketing there are no barriers but in international marketing there are many barriers such as cross cultural differences, language, currency, traditions and customs. Read more: http://www.differencebetween.com/difference-between-domestic- marketing-and-international-marketing/#ixzz2eNceO0vn 7 B.Moghimi@yahoo.co.uk
MNCs Definition by Size It is not unusual for corporate size to be used as a primary requirement for judging whether or not a company is multinational. But, corporate size should not be used as the sole criterion for multi-nationalism. 10 B.Moghimi@yahoo.co.uk
MNCs Definition by structure According to Aharoni, an MNC has at least three significant dimensions: structural, performance, and behavioral. Structural requirements for definition as an MNC include the number of countries in which the firm does business and the citizenship of corporate owners and top managers B.Moghimi@yahoo.co.uk 11
MNCs Definition by performance Definition by performance depends on such characteristics as foreign earnings, sales, and assets. These performance characteristics indicate the extent of the commitment of corporate resources to foreign operations and the amount of rewards from that commitment. The greater the commitment and reward, the greater the degree of internationalization. 12 B.Moghimi@yahoo.co.uk
MNCs Definition by behavior Behavior is somewhat more abstract as a measure of multi-nationalism than either structure or performance, though it is no less important. This requirement concerns the behavioral characteristics of top management. Thus, a company becomes more multinational as its management thinks more internationally. Such thinking, known as geo-centricity, must be distinguished from two other attitudes or orientations, known as ethnocentricity and poly-centricity. 13 B.Moghimi@yahoo.co.uk
THE PROCESS OF INTERNATIONALIZATION (1) no regular export activities, (2) export via independent representatives (agent), (3) establishment of an overseas sales subsidiary, (4) overseas production/manufacturing. 15 B.Moghimi@yahoo.co.uk
Andersen U-model 16 B.Moghimi@yahoo.co.uk
BENEFITS OF INTERNATIONAL MARKETING Survival and growth Sales and profits Diversification Inflation and price moderation Employment Standards of living 18 B.Moghimi@yahoo.co.uk
Understanding of marketing process International marketing should not be considered a subset or special case of domestic marketing. When an executive is required to observe marketing in other cultures, the benefit derived is not so much the understanding of a foreign culture. Instead, the real benefit is that the executive actually develops a better understanding of marketing in one’s own culture. For example, Coca-Cola Co. has applied the lessons earned in Japan to the US and European market 19 B.Moghimi@yahoo.co.uk
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