Posted By: Kelsey Schafer, Robin Wade, Josh Goldstein, Will Norris
Marketing In an International Setting

  1. Why would companies want to go international?

  • Increased Revenue
  • Economics of Scale
  • Add prestige to brand
  • First move into potential growth
  • Reduce buyer power
  • Reduce effect of seasonality
  • Reduce company's exposure to possible economic and political instability in a single country
  • Reduce overall costs by sourcing in new markets, ultimately export
  • Innovation, Knowledge Advantage or supply chain advantage.
  • Need is greater in international markets
  • Increase overall market share geographic scope
  • Escape government regulation
Markets
New - Divide
Existing - Not applicable or do not venture out


Sell new products to existing markets- revenue

Sell new products to new markets- diversification
Sell existing products to new markets- share of wallet
Sell existing products to existing markets- market share


Products
New - Share of profits
Existing - Market Segment
2. Why not go international?
  • Cultural differences, Language barrier
  • Local markets not staturate
  • Regulatory ristrictions
  • Increased investment
  • Competitive presence
  • Corruption
  • Loss of brand equity
  • IP stealing
  • Polotical instability
  • absence of skilled labors
  • Lack of infrastructure
  • Knowledge gap
  • Economic Reasons Economic instabilityii, Not enough market, Inability to pay (paying capacity)
3. How to go International
  • First must look at your value proposition and see where it makes sense to increase your market segment geographically. Your value proposition will help you determine the likelihood of capturing the possible rewards as well as the likelihood of reducing the risks that seem inherent of going overseas.
  1. Exporting
i.Fast
ii.Low level commitment
iii.Low level Risk / Investment
iiii. BUT Brand risk, Might not be as effectivesness as other ways of going international
The company lost their control.
  • Risk in that you do not know what will be done with your product in the new market. Someone may buy your product and use it to copy.
2. Licensing/Franchaising i. Market knowledge
ii. More control comparing to exporting
iii. BUT Brand risk – Strict Contractual Regulations (depends on the rule of law of the country)
3. Joint venture i. Control
Can reduce the political or economic risks. It also can reduce the time to bring a product into new market oversea.
ii. Synergy effctive (for example, based on knowledge)
4. Direct investment i. Most control comparing to other ways of going international
iii. BUT more financial risk
  1. Standardization vs. Customization
    1. Italian wedding dressmaker – increased price competition caused loss of business.
    2. So what did they do?
i.Studied markets overseas and produced dresses that fit the benefit profile of the new markets. Arranged fashion shows overseas. Kept the dressmaking in Italy to maintain the high quality product but kept in constant touch with clients for personalization
    1. Product -
i. Customize the things seen and valued by customer
ii. Standardize the things that are not seen by the customer. But also delivering due to your competitive advantage.
    1. Place - Dist. - often NEC
    2. Price - Be Careful Price might go up, but should not go down This affects the value proposition and the brand.
    3. IMC - Be careful, be sure to customize for languages and cultures (ex. the Nova which means, "don't go" in Spanish)
    4. Participation - not as open , do not move as fast
Take aways:
  1. Why would companies want to go international? (valaue proposition)
  2. Why not go international? (Controls vs. Risks)
  3. How to go International (to ship your products to your customers, you need to standarize)