Intl Bus07 Week 6 Marketing and HR

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Published on January 13, 2009

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Global Marketing and HR Management : Global Marketing and HR Management Intl Business Week 6 Spring 07 Globalization of Markets and Brands : Globalization of Markets and Brands “A powerful force drives the world toward a converging commonalty (sic), and that force is technology.” Theodore Levitt, Harvard Business Review. CNN and MTV. Overstatement? Cultural and economic differences act as a major brake on any trend toward global consumer tastes and preferences. Market Segmentation : Market Segmentation Cultural Differences : Cultural Differences Range of dimensions: Social structure. Language. Religion. Education. Most important - the impact of tradition. Impact is greatest in foodstuffs and beverages. Also, scent preferences differ from country to country. Some tastes and preferences becoming cosmopolitan: Coffee (Japan and Great Britain). American-style frozen dinners (Europe). Levitt’s global culture still a long way off. 1. Product Economic Differences : Economic Differences Consumer behavior is influenced by economic development. Consumers in highly developed countries tend to have extra performance attributes in their products. Consumers in less developed countries tend not to demand these extra performance attributes. Cars: no air-conditioning, power steering, power windows, radios and cassette players. Product reliability is more important. Contrary to Levitt, consumers in the most developed countries are often unwilling to sacrifice preferred attributes for lower prices. 1. Product Product and Technical Standards : Government standards can prevent the introduction of global products. Different technical standards impede global markets, as well. Come from idiosyncratic decisions made long ago. Video equipment. Television signals. Product and Technical Standards 1. Product Distribution Strategy : Distribution Strategy Three different distribution systems: Retail concentration Channel length. Channel exclusivity. Choice of channel: Cost/benefit of each alternative vary from country to country. Longer the channel, the higher the price. But, cuts selling costs in fragmented market. Market access. Shorter channel, lower price. Concentrated market. 2. Place A Typical Distribution System : A Typical Distribution System Manufacturer Inside the Country Manufacturer Outside the Country Import Agent Wholesale Distributor Retail Distributor Final Customer 2. Place Slide 9: Distribution Can Present Interesting Problems 2. Place Communications Strategy : Communications Strategy Effectiveness of international communications can be impacted by: Cultural barriers. Need to develop cross-cultural literacy. Source and country of origin effects. Receiver of the message evaluates it based upon the status of the sender. Country of origin effects: Emphasize/de-emphasize foreign origin. Noise levels. Tends to reduce the effectiveness of a message. Developed countries - high. Less developed countries - low. Push versus Pull: Push emphasizes personal selling. Pull depends on mass media advertising. 3. Promotion Attractiveness of Push versus Pull Strategies : Attractiveness of Push versus Pull Strategies 3. Promotion Push-Pull Mix : Push-Pull Mix 3. Promotion Global Advertising : Global Advertising Standardized: Significant economic advantages. Scarce creative talent. Many global brand names. Non-standardized: Messages in one country may fail in another. Advertising regulations can be a restriction. Dealing with Country differences: Select some features for standardization and others for localization. Saves some costs. 3. Promotion Slide 14: Advertising in New Delhi Pricing Strategy : Pricing Strategy Price discrimination: Charging what the market will bear. Two factors: Must keep national markets separate Different price elasticities Arbitrage:Charging different prices in different countries for same product. Doesn’t always work. Ford in Germany and Belgium Sometimes it does. Ford in UK and Belgium 4. Price Determinants of Demand Elasticity : Determinants of Demand Elasticity Income level and competitive conditions determine elasticity. Elasticity (price) tends to be be greater in countries with low income levels. Elasticity (demand) tends to be greater in countries where there are many competitors. 4. Price Strategic Pricing : Strategic Pricing Predatory pricing: Using price as a competitive weapon. Multipoint pricing strategy: When two or more international firms compete against each other in two or more national markets. A firm’s pricing strategy in one market may impact a rival in another market. Experience curve pricing: Firms price low worldwide to build market share. Incurred losses are made up as company moves down experience curve. 4. Price Regulatory Influences on Prices : Regulatory Influences on Prices Antidumping regulations: Selling a product for a price that is less than the cost of producing it. Predatory pricing and experience curve pricing may violate regulations. Antidumping rules place a floor under export prices and limit a firm’s ability to pursue strategic pricing. Competition Policy: Promote competition. Restrict monopoly practices. Can limit the prices a company can charge in a given country. 4. Price Dumping: GATT and the U.S. : Dumping: GATT and the U.S. GATT:Sale of an imported product at ‘less than fair value’ and causes ‘material injury to a domestic industry’. US: An unfair trade practice that results in injury, destruction, or the prevention of the establishment of an American industry. 4. Price Configuring the Marketing Mix : Configuring the Marketing Mix The Strategic Role of International HRM : The Strategic Role of International HRM Insure that HRM policies are congruent with the firm’s strategy, structure and controls. HR MANAGEMENT Types of Staffing Policy : Types of Staffing Policy HR MANAGEMENT The Expatriate Problem : The Expatriate Problem Citizens of one country working in another. Inpatriates: expatriates who are citizens of a foreign country working working in the home country of their multinational employer. Expatriate failure: Premature return of the expatriate manager to his/her home country. Cost of failure is high: Estimate = 3X the expatriate’s annual salary plus the cost of relocation (impacted by currency exchange rates and assignment location). HR MANAGEMENT Expatriate Failure Rates : Expatriate Failure Rates HR MANAGEMENT Reason for Expatriate Failure : Reason for Expatriate Failure US Multinationals Inability of spouse to adjust. Manager’s inability to adjust. Other family problems. Manager’s personal or emotional immaturity. Inability to cope with larger overseas responsibilities. Japanese Firms Inability to cope with larger overseas responsibilities. Difficulties with the new environment. Personal or emotional problems. Lack of technical competence. Inability of spouse to adjust. ?European Multinationals: Inability of spouse to adjust. 1. HR MANAGEMENT Expatriate Selection : Expatriate Selection Self-orientation: Strengthen self-esteem, self-confidence and mental well-being. Others-orientation: Enhance ability to interact with host-country nationals. Perceptual ability: The ability to empathize - understand why people in host-country behave the way they do. Cultural toughness: How well an expatriate adjusts to a particular posting tends to be related to the country of assignment. An executive’s domestic performance does not (necessarily) equate to his/her overseas performance. HR MANAGEMENT Repatriation of Expatriates : Repatriation of Expatriates 1. HR MANAGEMENT Compensation : Compensation Two issues: How to adjust compensation to reflect national differences in economic circumstances and compensation practices. How expatriate managers should be paid. HR MANAGEMENT National Differences in Compensation : National Differences in Compensation HR MANAGEMENT Compensation Issues : Compensation Issues HR MANAGEMENT Expatriate Pay : Expatriate Pay Typically use balance sheet approach. Equalizes purchasing power across countries. Provides financial incentives to offset qualitative differences between assignment locations. Components of a typical expatriate compensation package include: Base salary. Foreign service premium. Various allowances. Tax differentials. Benefits. HR MANAGEMENT

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