International marketing

International marketing involves recognising that people all over the world have different needs. Companies like Gillette, Coca-Cola, BIC, and Cadbury Schweppes have brands that are recognised across the globe. While many of the products that these businesses sell are targeted at a global audience using a consistent marketing mix, it is also necessary to understand regional differences, hence the importance of international marketing. Organisations must accept that differences in values, customs, languages and currencies will mean that some products will only suit certain countries and that as well as there being global markets e.g. for BIC and Gillette razors, and for Coca-Cola drinks, there are important regional differences - for example advertising in China and India need to focus on local languages. Just as the marketing environment has to be assessed at home, the overseas potential of markets has to be carefully scrutinised. Finding relevant information takes longer because of the unfamiliarity of some locations. The potential market size, degree and type of competition, price, promotional differences, product differences as well as barriers to trade have to be analysed alongside the cost-effectiveness of various types of transport. The organisation then has to assess the scale of the investment and consider both short- and long-term targets for an adequate return.

Before becoming involved in exporting, an organisation must find the answers to two questions:

1. Is there a market for the product?
2. How far will it need to be adapted for overseas markets?

The product must possess characteristics that make it acceptable for the market - these may be features like size, shape, design, performance and even colour. For example, red is a popular colour in Chinese-speaking areas. Organisations also have to consider different languages, customs and health and safety regulations.

Standardisation

If a company offers a product, which is undifferentiated between any of the markets to which it is offered, then standardisation is taking place. The great benefit of standardisation is the ability to compete with low costs over a large output.

The diagram below illustrates the use of a standardised products and marketing mix:

In most markets, however, there are many barriers to standardisation. It is not difficult to think about the standard marketing mix for a product and how this might vary from one country to another. For example:

Product - tastes and habits differ between markets
Price - consumers have different incomes
Place - systems of distribution vary widely
Promotion - Consumers' media habits vary, as do language skills and levels of literacy.

With differentiated marketing, on the other hand, an organisation will segment its overseas markets, and offer a marketing mix to meet the needs of each of its markets.

The great benefit of standardisation is that costs are lowered, profitability is increased and the task of supplying different markets becomes substantially easier.

The diagram illustrates the process of adapting the marketing mix to meet the needs of different geographical markets:

However, it could also be argued that the success of many products in international markets has come about because marketers have successfully adapted their marketing mix to meet local needs.

To a large extent the standardisation/adaptation dilemma depends upon an organisation's view of its overseas markets and the degree to which it is prepared to commit itself to meeting the needs of overseas customers. There are three main approaches, which can be applied:

1. Polycentrism - with this marketing approach, a business will establish subsidiaries, each with their own marketing objectives and policies, which are decentralised from the parent company. Adaptation takes place in every market using different mixes to satisfy customer requirements.
   
2. Ethnocentrism - overseas operations are considered to be of little importance. Plans for overseas markets are developed at home. There is little research, the marketing mix is standardised and there is no real attention to different customer needs and requirements in each market.
   
3. Geocentrism - standardisation takes place wherever possible and adaptation takes place where necessary. This is a pragmatic approach.
   

A confectionery and soft drinks manufacturer like Cadbury Schweppes typically produces a range of standard items that are sold throughout the globe using similar marketing mix. However, differences may occur in such aspects as distribution channels and pricing as well as advertising in languages that are relevant to particular cultures. In addition such a company would produce some products which cater for particular tastes, and which are relevant to particular cultures. New products might then be tested in a regional area, before consideration of which other areas of the globe to roll out that product to.

• Standardisation - refers to manufacturing, marketing or employing other processes in a standard way.
  
• Differentiation - is the process of making products or aspects of the marketing mix different so as to appeal to different markets.

--------

Sumit Jaswal

Source: http://www.thetimes100.co.uk/theory/theory--international-marketing--241.php

Abell’s :: Three Dimensional Business Definition

The Three Dimensional Business Definition framework from Harvard Professor Derek F. Abell is a model that can be used for defining the business of a company. The definition of a business is an issue that should not be taken lightly. In his book "Defining the Business - The Starting Point of Strategic Planning" Abell says that the standard two dimensional way of looking at a business (products and markets) has serious flaws. He suggests a three dimensional model, with the following 3 axes:

 

1. Served Customer Groups. Categories of customers. (WHO)

2. Served Customer Functions. Customer needs. (WHAT)

3. Technologies Utilized. The way that the needs are being satisfied. (HOW)

 

For more info use this link:

http://www.12manage.com/methods_abell_three_dimensional_business_definition.html

 

Sumit Jaswal

Strategic Planning

 

OBJECTIVES

The objective of strategic planning is to achieve a sustainable competitive advantage that will deliver healthy profits. The strategic plan analyses the optimum fit between a business's resources and opportunities and takes into account how a business may, or will, need to adapt to thrive in a changing competitive environment. Strategic planning focuses on the medium- to longer-term future of a business, generally a time horizon of three to five years, or occasionally up to ten years.

 

Gary Hamel and C.K. Prahalad, two business strategists, advocate that strategy involves setting goals that stretch the business, but the strategic planning element of a business plan should focus on the tangible and concrete rather than the aspirational.

 

For a new business, the strategy is the foundation on which the business plan is built. For a business being developed within an existing business, the strategy behind the new business must fit with the overall strategy of the existing business. The marketing strategy will be either implicit in the strategic plan or an explicit subsection of it.

 

APPROACHES TO STRATEGIC PLANNING

All businesses have a strategy, be it implicit or explicit. At its simplest, the strategic plan is a description of what the business is doing and the rationale behind it. In larger businesses, strategic planning has become a formalised process with a department dedicated to that process. In other cases, strategy is part of the marketing function, that is, strategic planning is synonymous with strategic market planning.

 

Some authors distinguish between "prescriptive" and "emergent" approaches to strategic planning. The prescriptive approach emphasises the sequential nature of the planning process as shown in Chart 4.1. This implies that analysis and strategy selection are distinct from implementation.

 

The emergent approach is more experimental – a strategy is constantly adjusted in the light of operational reality. This implies a more short-term tactical approach to planning. In practice, the difference between the two approaches may simply be the frequency of reviews. Although it would be wrong to follow blindly a prescribed course once it has been set, a "flavour of the month" supposedly emergent approach to strategy makes organisational life extremely difficult.

 

A business plan should involve a prescriptive approach because it relates to a point in time at which the business plan is made.