International Marketing Strategies. Session 3-4

Transcription

1 International Marketing Strategies Session 3-4

2 The International Marketing Task Political/ Legal Forces Foreign Environment (Uncontrollable Domestic Environment (Uncontrollable Economic Forces Country Markets Cultural Forces Geography And Infrastructure Political/ Legal Forces (Controllable) Firm Characteristics Price Promotion Product Research Channel of Distribution Competitive Structure Competitive Forces A B C A B C Environmental uncontrollable elements Economic Climate Structure of Distribution Level of Technology

3 Marketing Decision Factors These factors are found within the company environment where the marketer has control over them. These factors are: Price Promotion Product Place (Channels of Distribution)

4 The Value Chain

5 Simplified Version of the Value Chain

6 Centralizing Upstream activities and Decentralizing downstream activities (Global + International Orientation)

7 Virtual Value Chain as Supplement to Physical Value Chain

8 ANALYSIS LEVELS MACRO (COUNTRY) LEVEL: PEST / PESTL PORTER S DIAMOND SWOT MEZZO (INDUSTRY) LEVEL: PORTER S 5 FORCES COMPETITIVE POSITIONING C-ANALYSIS 3 KEY ISSUES: 1. APPLICABILITY & RELEVANCE 2. RISK MITIGATION 3. SUPPORT FOR DECISION-MAKING MICRO (COMPANY) LEVEL: INTERNAL COMPANY ANALYSIS (capabilities, resources, etc) DUE DILLIGENCE

9 EXAMPLE: PORTER S DIAMOND Which factors are key for your business venture? What drives demand? Decision-making factors Elasticity? Apply the data so it is relevant to your company and line of business!

10

11 PEST ANALYSIS 1/3

12 PEST ANALYSIS 2/3

13 PEST ANALYSIS 3/3

14 PORTER S 5 FORCES ( Business Strategy)

15 Stages of Researching Foreign Market Potential Stage One Preliminary Screening for Attractive Country Markets (Which foreign Markets warrant detailed Investigation?) Stage Two Assessment of Industry Market Potential (What is the aggregate demand in each of the selected Markets?) Stage Three Company Sales Potential Analysis (How Attractive is the potential demand for company Products and services?)

16 Using Trade Databases Trade Map WITS World Bank

17 Prospects for Diversification

18 Political Risk Analysis Factors Examples Level 1 General Instability Revolution, external aggression Level 2 Expropriation Nationalization, contract revocation Level 3 Operations Import restrictions, local content rules, taxes, export requirements Level 4 Finance Repatriation restrictions, exchange rates

19 Governance Index x#reports CURRENT PREVIOUS RATINGS SCORES RATINGS SCORES Rwanda C 51C 52 Niger D 63D 64 Chad D 67D 67 Ecuador C 60C 60 Mozambique C 54C 54 Somalia E 86E 86 South Africa C 41C 41 Sudan D 78D 78

20 Researching the Industry India s export to world India s export to country X Country X s import from world

21 Existing and potential trade between India and World in 2014 Product: 8703 Cars (incl. station wagon) Product Code ' ' ' ' ' ' ' ' ' Product Label India's exports to world Annual growth in Value in 2014, value between USD thousand , %, p.a. Share in world exports, % Indicative potential trade, USD thousand Snowmobiles, golf cars and similar vehicles Automobiles w reciprocatg piston engine displacg not more than 1000 cc Automobiles w reciprocatg piston engine displacg > 1000 cc to 1500 cc Automobiles w reciprocatg piston engine displacg > 1500 cc to 3000 cc Automobiles with reciprocating piston engine displacing > 3000 cc Automobiles with diesel engine displacing not more than 1500 cc Automobiles with diesel engine displacing more than 1500 cc to 2500 cc Automobiles with diesel engine displacing more than 2500 cc Automobiles nes including gas turbine powered

22 List of importing markets for the product exported by India in 2014

23 Existing and potential trade between India and Mexico in 2014

24

25 Preliminary Screening This involves rating the countries on the macro level indicators

26 Country Identification Candidate countries could be: Angola Mexico South Africa Nigeria

27 Environmental Research Physical Sociocultural Economic Regulatory

28 In-Depth Screening Market Size Market Size= (Local Production-Export)+Imports Indirect measure: GNP, Population size, growth in GNP and imports of relevant goods

29 In Depth Screening Market Growth Growth estimates obtained by getting the market size measures for different years and computing the growth rate

30 In Depth Screening Competitive Intensity Level of competition can be measured by the number of competitors in the market and relative size distribution of market shares.

31 In Depth Screening Trade Barriers Tariffs, taxes, duties and transportation costs can be ascertained from official government publications.

32 Final Selection Forecasted revenues and costs are compared to find the country market that best leverages the resources available. Importance /Weights are assigned to various variables in the country report The weighted sum may be chosen as a criteria to get the final list of two-three countries.

33 Forecasting Country Sales Sales = Industry Sales X Market Share (Expected)

34 Industry Sales (Build up Method) 1.Build-up method- market sales are estimated on the basis of separate estimates from individuals knowledgeable about certain segments of the market. 2.These single estimates of various parts of the market are aggregated (build-up) into an evaluation of total market size.

35 Industry Sales: Forecasting Analogy The basic premise underlying forecasting by analogy is that the sales in one lagging country will show similarities in another leading country where product is already marketed. S b (2015)=[S a (2000)/GNP a (2000)]xGNP b (2015) To account the difference between the countries, the sales figures are usually weighted by a measure such as GNP or population size, S = Unit sales, subscript a=leading country, subscript b= lagging country and there is a lag of 15 years. [S a (2000)/GNP a (2000)]= Unit sales per dollar (or the currency equivalent) By multiplying the above to lagging country GNP a sales forecast is arrived to

36 Judgmental Forecasts Jury technique Expert pooling Panel Consensus Delphi Method

37 Forecasting Market Size for the firm Armstrong's Regression Model: R (Average Sales per potential Buyer) =f(e, P, B, T, W, C, G) E= Standard of living Index P= Price of the good B= Buying unit index (household per adult) T= Temperature W=Rainfall C=Proportion of children in the population G= Growth of per capita income per year

38 Forecasting Market Size for the firm The second step is to get the size of the potential market using a multicaptive chain M=(T)x(L)X(A)X(N) M= Number of potential buyers T=Total population L= Literacy rate (proportion) A= Proportion of population in the desired age group (e.g., 18-64) N= Proportion of nonagricultural employment

39 Forecasting final Size S= (R) X (M) S= forecasted sales in unit per year in a given country.

40 Sources of Secondary Data