We live in a global market. While reading this information, you may be sitting in a chair imported from Brazil at a table imported from Denmark or under a lamp from Italy. On the table you can have a PC from Taiwan or maybe a Macintosh designed in the United States and made in Ireland. Your shoes may come from Bulgaria, and the coffee you are possibly sipping may come from Latin America or Africa. A Santana CD, recorded by Phillips in the Netherlands, plays in the background on your favorite rock station. You are planning a trip to Russia where you will meet some friends in Red Square for dinner at the new McDonald's restaurant. Welcome to the 20th century. The marketing fantasy of yesterday has become the reality of today: a global market has emerged.
"International marketing can be defined as the process of focusing the resources (people, money and physical goods) and the objectives of an organization in the opportunities and threats of the world market".
The decades after World War II have been a period of unprecedented expansion for companies in international markets.
Today, marketing is essential for the survival of companies. A company that fails to go global runs the risk of losing its business to foreign competitors with lower expenses, more experience, higher quality; in short, more value to the consumer.
1.2 THE CONCEPT OF MARKETING
Marketing is the process of focusing the resources and objectives of an organization on the opportunities and needs of the environment.
Marketing is a set of concepts, instruments, theories, practices, procedures and experiences; Together these elements constitute a body of knowledge, which can be taught and learned. Marketing as a discipline is universal, although the practice of marketing varies from country to country. Each individual is unique and each country is unique. This reality of differences means that we cannot always directly apply the experience in all countries equally.
The concept has evolved from the original concept, which focused marketing on the product and on making a "better" product, where "better" is based on internal guidelines and values. The goal was profit, and the way to achieve this goal was by selling, or by persuading the potential customer to exchange their money for the company's product.
| Concept | |||
| Old | New | Strategic | |
| Epoch
Focus |
Pre-1960
Product |
1960-1990
Client |
1990-
Way of doing business |
| Outcome | Information and sale | Integrated marketing mix | Knowledge and experience |
| Purpose | benefit | Value | Mutually beneficial relationship |
| Marketing is... | Sale | A function | Everything |
The “new” concept of marketing, which began around the 1960s, changed the focus of marketing from product to customer. The profit objective was still in force, but the way to achieve the objective included the marketing mix, or the “4 Ps”: product, price, promotion and position (distribution channels).
In the 1990s the concept evolved by shifting the focus of marketing from the customer or product to the customer in the broader context of the external environment. Knowing everything about the customer is not enough. To be successful, marketers must know the customer in context that includes competition, government policy and regulation, and the economic, social and political forces that make up the evolution of markets.
The goal of marketing is to create value for stakeholders, and the key stakeholder is the customer. If your client can get better value from the competition because they are willing to accept the level of benefits for their investments, the client will choose the competition, and they will be out of business.
Jack Welch, president and CEO of General Electric called the strategic concept of marketing as borderless marketing; the goal is to remove communication barriers between marketing and other functional areas.
This guides all company personnel toward consumer value issues. A company that adheres to the concept of borderless marketing makes all employees in the organization responsible for and involved in marketing. “Everyone” includes receptionists, designers, manufacturing employees, and customer service representatives.
1.3 THE THREE PRINCIPLES OF MARKETING
The essence of marketing can be summarized in three great principles. The first identifies the purpose and task of marketing, the second identifies the competitive reality of marketing, and the third identifies the main way to achieve the first two.
- Customer value and value education
The essence of marketing is to create value for the customer that is higher than the value given by competitors. The equation of value is a guide for this task.
As suggested by this equation, customer value can be increased by expanding or improving product and / or service benefits, by reducing the price, or by using a combination of these elements.
Knowledge of the customer combined with innovation and creativity can lead to improved product and service that are important to customers. If the perceived benefits are strong enough and valued by customers, a company does not need to compete via prices to win customers.
- Competitive or differential advantage
A competitive advantage is a total offer, relative to the relevant competition, that is more attractive to customers. The advantage can exist in any component of the company: in the product, in the price, in the advertising, in the promotion at the point of sale, and in the distribution of the product. The total offer must be more attractive than that offered by the competition to establish competitive advantage.
A company may have a product that is equivalent in quality to the competition but not better; If this product is offered at a significantly lower price and customers can be made to believe that the quality of the company's product is equal to that of the competition, the price advantage will give the company a competitive advantage.
- The focus or concentration of attention
Focus is necessary to be successful in creating customer value through competitive advantage.
A clear focus on the needs and wishes of the customer and competitive offering is necessary to mobilize the effort required to maintain a differential advantage. This can only be achieved by focusing or concentrating resources and efforts on the customer's needs and wants and on how to deliver a product that meets these needs and wants.
2.From NATIONAL MARKETING TO GLOBAL / TRANSNATIONAL MARKETING
The following table of study will highlight the differences between national, international, multinational, global and transnational marketing.
STUDY GUIDE
- According to the previous topic, define in your own words what international marketing is.
- What are the basic goals of international marketing?
- Using an example, explain the model of the Value Chain without borders (the example must be adapted to a company, mentioning each point in the chain).
- In your own words explain what competitive advantage is.
- Give an example of how marketing without borders occurs , in a company (transnational or national).
- What are the differences between national, international, multinational, global and transnational marketing.
- According to the above, which one do you consider to be the best?
- CHARACTERISTICS OF REGIONAL MARKETS
What do we live for, if not to make the lives of others less difficult.
Nursing Student Association
Chatam, Ontario
2.1 ECONOMIC COOPERATION AND TRADE AGREEMENTS
Since World War II there has been great interest in economic cooperation among nations. Stimulating this interest in the success of the European Community (now European Union), because it was inspired by the US economy.
There are many degrees of economic cooperation, ranging from agreement between two or more nations to reductions in trade barriers and full economic integration of two or more national economies.
There are various agreements that have been made around the world, among the best known are:
2.2 REGIONAL ECONOMIC ORGANIZATIONS
Countries in each region have tried to lower barriers to trade between their regions. The most important regional economic cooperation agreements will be described below.
| COMMERCIAL ORGANIZATION | FTA
(TLC) / North American Free Trade Agreement (NAPHTHA). |
| TRAINING DATE | On December 17, 1992, and entered into force on January 1, 1994. |
| MEMBER COUNTRIES | Made up of Canada, Mexico and the United States. The respective signatories to the Treaty were Canadian Prime Minister Brian Mulroney, Mexican President Carlos Salinas de Gortari, and US President
George Bush. |
| PURPOSE | Establish the gradual elimination of tariffs, and other barriers to free trade, on most products manufactured or sold in North America, as well as the elimination of barriers to international investment and the protection of intellectual property rights in said subcontinent. |
|
TRAINING DATE |
It was created by virtue of the Montevideo treaty, signed in 1960 and which entered into force on June 2, 1961. |
| MEMBER COUNTRIES | The first members were Argentina, Brazil, Chile, Mexico, Paraguay, Peru and Uruguay.
Later Colombia and Ecuador would be incorporated in 1961, Venezuela in 1966 and Bolivia in 1967. |
| PURPOSE | Its main objective when it was founded was to create a free trade zone between the member countries to gradually eliminate tariffs and establish a common market in Latin America.
The main governing bodies of ALALC were the Conference, the Permanent Executive Committee and, since 1966, the Council of Ministers of Foreign Affairs. |
| COMMERCIAL ORGANIZATION | Caribbean Community (CARICOM) |
| TRAINING DATE | Founded in 1973 by the Treaty of Chaguaramas (Venezuela), CARICOM replaced the Caribbean Free Trade Association, which had been created in 1965. |
| MEMBER COUNTRIES | The full members are: Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname and Trinidad and Tobago. The British Virgin Islands and the Turks and Caicos Islands are associate members. The Bahamas belong to the Community but not to the Common Market created within it, while Anguilla, the Dominican Republic, Mexico, Puerto Rico and Venezuela are observer countries. CARICOM's headquarters are in Georgetown, Guyana. |
| PURPOSE | Organization established to promote regional unity and coordinate economic and foreign policy in the Caribbean.
The Caribbean Community carries out three main activities: 1. Economic cooperation through the Caribbean Common Market, 2. The coordination of foreign policy 3. Collaboration in fields such as agriculture, industry, transportation and telecommunications, health, education, science and technology, culture, sports, and tax administration. The policy is determined in the conferences of the heads of government, in which the finances of the Community are also organized. The Caribbean Common Market organized by CARICOM also deals with trade, industry, economic planning and development programs for less developed member countries. Among its future objectives is the creation of a monetary union and a single internal market. |
| COMMERCIAL ORGANIZATION | Association of Southeast Asian Nations (Regional Organization of Southeast Asian States ASEAN) |
| TRAINING DATE | Founded in Bangkok in August 1967, it was created during the Vietnam War, in the spirit of the new rapprochement between Malaysia and Singapore. |
| MEMBER COUNTRIES | Made up of representatives from Indonesia, Malaysia, the Philippines, Singapore and Thailand, to which Brunei joined, after obtaining its independence in 1984, and later Vietnam, Laos and Myanmar (formerly Burma) and Cambodia. Its permanent secretariat is located in Jakarta (Indonesia). |
| PURPOSE | ASEAN's main objectives, set out in the Bangkok Declaration (1967), were to accelerate economic growth and promote regional peace and stability.
· In 1977 a joint forum was established with Japan, and three years later a cooperation agreement was signed with the European Community. In the late 1980s, ASEAN played an important role as a mediator in Cambodia's civil war. · In January 1992, ASEAN members agreed to establish a free trade area and reduce tariffs on non-agricultural products for a period of 15 years, beginning in 1993. · The ASEAN meeting in July 1994 recognized the need to strengthen relations among its members and admit new ones, as well as to play a more prominent role in regional security after the Cold War. · In July 1995 Vietnam joined as a full member. · The Asia-Europe Summit (ASEM), held in March 1996 - attended by ASEAN members, the United States, Japan, China, South Korea and the European Union - was a great international push for the seven countries of the Association. · In November 1996, ASEAN members, meeting in Jakarta, announced the early admission of Myanmar, Laos and Cambodia, the latter only as an observer, and formally admitted until 1998. |
| COMMERCIAL ORGANIZATION |
European Union (EU) |
| TRAINING DATE | The European Union was born on November 1, 1993, the date on which the Treaty of the European Union or Maastricht Treaty came into force, ratified a month earlier by the twelve members of the European Community. |
| MEMBER COUNTRIES | Belgium, Denmark, France, Germany, United Kingdom, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. With the entry into force of the Treaty, the EC countries became members of the EU, and the EC became the EU, which in 1995 was expanded with the entry into it of Austria, Finland and Sweden. |
| PURPOSE | Supranational organization in Europe dedicated to increasing economic and political integration and strengthening cooperation between its member states.
· With the Treaty of the European Union, European citizenship was granted to the citizens of each Member State. · Customs and immigration agreements were tightened to allow European citizens greater freedom to live, work or study in any of the member states, and border controls were relaxed. The goal was set to achieve a single European currency by 1999, the decisive one was the summit on the enlargement of the EU to the East, the meeting that the European Council held in Brussels on the first three days of May can be described as historic. 1998. In it, the EMU received the definitive push to face its decisive phase, characterized by the launch of the euro and the European Central Bank (ECB). · The institution of the European Monetary System (EMS) to give a certain stability to the relations between the currencies of the member states, and the advances in the elimination of internal trade barriers in order to establish a single market. The most significant development in the EC during the 1980s was the march towards the implementation of a single European market. The campaign to achieve this goal was promoted by Jacques Delors, the former French Minister of Economy and Finance, who became President of the European Commission in 1985. At the Milan (Italy) Summit, the Commission proposed a seven-year deadline for eliminate practically all trade barriers that still existed between member states. The European Council approved the plan,and the aim of reaching the European Single Market on January 1, 1993 accelerated reforms in the EC and increased cooperation and integration among member states. Ultimately, all of this culminated in the formation of the European Union. · The birth of the euro and the ECB, symbols of the third and final phase of EMU, as well as the future entry of new countries, were determining factors in the importance that the issue of EU financing acquired within it, as it affected the contributions that each country had to make to the common budgets and the items from these that it would receive in different concepts. · At the summit held in October 1998 in the Austrian city of Pörtschach, the main European leaders reached an agreement to promote an economic policy aimed at economic growth and the promotion of employment through a reduction in interest rates. In December of that same year, the European Council, meeting this time in Vienna, addressed the first negotiations and proposals for the reform of EU financing; At the heart of the matter was the negotiation of the so-called Agenda 2000, a budget package for the first seven years (2000-2006) of the 21st century, the discussion of which continued during the extraordinary summit held by the Council in February 1999 in Petersberg Castle (near Bonn, Germany). |
| COMMERCIAL ORGANIZATION | European Free Trade Association (ALEC) or European Free Trade Association (EFTA) |
| TRAINING DATE | European interstate economic body founded in 1960 |
| MEMBER COUNTRIES | Austria, Denmark, United Kingdom, Norway, Portugal, Sweden and Switzerland for the creation of a free trade area between the member states. |
| PURPOSE | Finland became an associate member in 1961 and became a full member in 1986; Iceland joined in 1970. Liechtenstein joined in 1991, although it already had an associate member status by having a customs union with Switzerland.
The ultimate goal of EFTA was the removal of barriers to trade and the promotion of greater economic cooperation in Western Europe, including the European Economic Community (EEC). In January 1967 the EFTA had eliminated internal tariffs, however; in 1973 the United Kingdom and Denmark left the organization to enter the EEC (now the European Union). Portugal left the organization for the same reasons in 1986, as did Austria, Switzerland and Finland in 1995. EFTA countries have signed individual trade and tariff agreements with the European Union, and in 1991 the two organizations agreed to create a common market, the European Economic Area, which would come into force in 1993. · EFTA is governed by a council composed of one representative from each member country. · The council meets three times a year and must monitor the tariff reduction system. · Various committees assist the council in the performance of its functions. Its headquarters are in Geneva. |
| COMMERCIAL ORGANIZATION | Economic Community of West African States (ECOWAS). |
| TRAINING DATE | It was founded in 1975 by the Treaty of Lagos and began its work in 1977. |
| MEMBER COUNTRIES | Its sixteen member states are: Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, and Togo. |
| PURPOSE | Supranational organization of the West African sphere, whose objective is to promote economic, social and cultural development in that region.
ECOWAS is administered through a secretariat, based in Lagos, Nigeria. ECOWAS has promoted the liberalization of trade and the gradual reduction of restrictions on the exchange of goods, services and people between member states. It has promoted interregional communications and transportation. |
- WORLD TRADE ORGANIZATION (WTO)
Created to promote and apply global free trade, the WTO was founded in 1993 by the Final Act that closed the Uruguay Round of multilateral negotiations contemplated in the General Agreement on Tariffs and Trade (GATT), which it replaces. The purpose of the WTO is to administer and control the 28 free trade agreements included in the Final Act, to supervise world commercial practices and to judge the commercial disputes that the member states present to it.
The Organization began to function on January 1, 1995 with a General Council made up of 76 member countries, although it is expected to grow as new nations are admitted.
Unlike its predecessor (GATT), it is a formally constituted entity whose decisions are binding on its members, although it is independent from the United Nations. The WTO provides a framework for the exercise of law within international trade, expands the provisions contained in the GATT and also includes services, intellectual property rights and investment.
Its permanent General Council is made up of the ambassadors of the member states to the WTO, who also form part of various specialized and subsidiary committees. All this is supervised by the Ministerial Conference, which meets every two years and appoints the Director General of the Organization.
The agreements administered by the WTO are expected to increase annual world trade by at least $ 755 billion by 2003, which would increase global revenues each year by about $ 235 billion.
STUDY GUIDE
- Mention what trade agreements exist. What is the fundamental purpose of economic unions. What are regional economic agreements? Mention three trade agreements in the American continent and which countries make it up. In your own words, mention What are the main objectives of the European Union? From the webliography provided, carry out an investigation about the fundamental purposes and which countries make up the World Trade Organization.
3. STRATEGIES FOR EXPANSION AND PENETRATION INTO THE GLOBAL MARKET
An optimist says. "The glass is half full." A pessimist expresses "It is half empty." A reengineering consultant states: “It seems that we have twice the glass it takes” Anonymous
3.1 INTRODUCTION
Cigars are the most widely distributed and performing consumer product in the world. However, as the number of smokers declined in many industrialized countries due to increased anti-smoking sentiments and health concerns, tobacco industry giants such as BAT Industrials of Great Britain and Phillips Morris Company of the United States. United have focused their attention on new market opportunities. In particular, tobacco companies orient their marketing strategies towards smokers in industrialized countries such as China, South Korea, Thailand, India and Russia.These are countries in which a combination of forces interacts, such as relatively high economic growth,the craze for smoking and the prestige assigned to western cigar brands. In addition, because many women in those countries view smoking as a symbol of better social position, tobacco companies strongly target women in their strategies.
The actions taken by these tobacco companies and others are examples of market segmentation and strategy orientation. Market segmentation represents an effort to identify and classify customer groups and countries according to common characteristics. Strategy orientation is the process of evaluating common segments. Strategy segmentation is the process of evaluating segments and concentrating marketing efforts on a country, region, or groups of people that has significant response potential. This strategy orientation reflects the reality that a business must identify the consumers it can most effectively reach. A company also needs to find a source for the product itself or buy it from an outside source.A related decision concerns the site of production or purchase of the product.
3.2 SEGMENTATION OF WORLD MARKETS
It is defined as the process of identification in specific segments, both groups of countries and individual consumer groups, of potential customers with homogeneous characteristics that have the possibility of showing similar purchasing behavior.
Today, global companies and the advertising agencies that work for them segment global markets according to one or more of the following criteria: demographic, psychographic, behavioral characteristics, and desired benefits.
Analysis of the psychographic segments:
- BSB Global Scan: This is a study that covers 18 countries, many of them located in the triad. To identify the attitudes that will help explain and predict buying behavior towards different product categories, the researchers studied the attitudes and values of consumers, as well as reading habits and attention to the media, buying patterns and product uses. The survey seeks to identify both global and country attitudes. The result of this study is the Target Scan, which describes five segments of the population:
- Efforts (26%): people oriented to the achievement of objectives, seek material pleasures and for them time and money are scarce. Successful (22%): wealthy, with the possibility of climbing a social ladder, have largely achieved success; for them social position and quality are important Depressed (13%): comprised of women, characterized by constant financial and family pressures Adapted (18%): older people who try to preserve their values and at the same time maintain their minds open when faced with change. Traditional (16%): this segment is rooted in the past and is attached to the heritage and cultural values of the country.
Global Sacan allows to identify similarities and differences in consumers across national borders, it also helps to highlight the differences between segments of different countries.
- DMBB European Consumer Study: This study focuses on Europe; identifying four groups with different lifestyles:
- Successful idealists: (5 and 25%): people who have achieved material and professional success, maintaining a commitment to ideals. Wealthy Materialists: These enterprising, status-conscious people use consumption to communicate their success to others. Satisfied rooters: (from ¼ to half the population). They are conservative people and feel more comfortable with family matters. Disgruntled survivors: they lack power and economic resources, feeling resentful towards society.
3.3 GLOBAL STRATEGY ORIENTATION
Segmentation is the process by which marketers identify groups of consumers with similar wants and needs. Strategy orientation consists of evaluating and buying from the identified groups in order to select those with the greatest potential. Then, a marketing mix is designed that provides the organization with the highest return on sales while offering the maximum value to consumers.
CRITERIA FOR ORIENTING STRATEGIES
The three basic criteria for evaluating opportunities in global target markets are the same as those applied in the orientation of strategies within the same country: the usual size of the segment and the forecast of growth potential, competition and compatibility. with the general objectives of the company and the possibility of successfully attracting an assigned market.
- Current segment size and growth potential: One of the benefits of targeting a global market segment is that, even if the domestic market segment is too small, a company can make a profit on a standardized product if the segment exists in several countries. The billions of members of the "MTV Generation" worldwide constitute a large market that, by virtue of its size, is very attractive to many companies.
China represents a single geographic market that offers attractive opportunities in many industries. It is important to consider the financial services opportunity; Right now, there are only 3 million credit cards in circulation, most of them used by businesses. Low saturation levels can also be found for personal computers, as there is one PC for every 6,000 people, while the proportion in the United States is one computer for four people. The opportunities for automakers are even greater; China owns 1.2 million cars, one for every 20,000 Chinese, and only 60,000 of those cars are owned by private citizens.
- Potential Competition: A market segment of the market that is characterized by intense competition should be avoided. An example of this is Kodak's position as the undisputed market leader in the US $ 2.4 billion color photographic film market did not stop Fuji from launching an offensive as a competitor. In addition to offering traditional types of 35mm film at prices lower than Kodak's, Fuji made quick inroads by introducing several new films aimed at the “advanced hobbyist” segment that Kodak had neglected. Despite its initial efforts, Fuji's share has been 10 or 12% in the US market, due to the fact that Kodak is positioned in supermarkets and pharmacies,in addition to maintaining agreements with amusement parks that guarantee the sale of only Kodak films, while Fuji must compete with Polaroid. For this reason Fuji has diverted its attention from the US market and has focused on the European market where Kodak dominates only 40% and Fuji enjoys 25% of the European market. Compatibility and possibility: if a market is large enough and if strong competitors are absent or do not represent insurmountable obstacles, then the final consideration is whether a company can and should orient its strategies towards that market. In many cases, many resources are required to reach global market segments to pay for distribution costs and travel for company personnel. L'Oreal, a French cosmetics company,has continued its plans to distribute its Biotherm line in the United States despite the fact that the Estée Lauder Clinique line is well established. L'Oreal has a multi-billion dollar fund to help finance the effort. At the end of 1995, L'Oreal announced that it would acquire the Maybelline cosmetics line for $ 508 million, this acquisition propelled L'Oreal from fourth place to second place in the US cosmetics market.This acquisition propelled L'Oreal from fourth place to second place in the US cosmetics market.This acquisition propelled L'Oreal from fourth place to second place in the US cosmetics market.
SELECTING A GLOBAL MARKETING STRATEGY
It will be necessary to design an adequate marketing strategy if the decision to continue is made after evaluating the identified segments, considering the three criteria presented above. There are three basic categories of global marketing strategies:
- Standardized Global Marketing: It is analogous to mass marketing that takes place in a single country. It involves creating the same marketing mix for a mass market of potential consumers. This strategy requires an extensive distribution of the largest number of outlets. The main attraction of standardized global marketing is that it is lower in production costs. When Revlon announced that it would use the same US advertising strategy around the world, its strategy would call for the development of large consumer markets in Central and Eastern Europe. Concentrated global marketing: It involves designing a marketing mix that reaches a single segment of the world market, as has been done by House of Lauder, Chanel and other cosmetic houses that successfully attract the wealthy and prestigious segment of the market. Differentiated Global Marketing- Represents a more ambitious approach than concentrated global marketing, involves targeting strategies toward two or more different market segments with multiple marketing mixes. This strategy allows a company to have a broader coverage of the market. In the cosmetics industry, Unilever NV and Cosmair Inc. follow differentiated global marketing strategies and target both ends of the perfume market. Unilever Attempts to Lure the Luxury Market With Calvin Klein and Elizabeth Taylor Passion; Wind Song and Brut are brands aimed at the mass market. Cosmair sells Tresnor and Giorgio Armani Gio to the wealthy segments of the market and Gloria Vanderbilt to the poorer segments.
3.4 SUPPLY
In global marketing, the consumer value issue is linked in a complex way to the sourcing decision. If consumers are nationalists, they can give a positive value to the characteristic of “made in the country of origin” (Made in Mexico).
The sourcing decision highlights three roles of marketing in a global competitive strategy. The first relates to the marketing setup. Although many marketing activities must take place in each country, it is possible to gain advantages by concentrating some of the marketing activities in one location. The service, for example, must be provided in each country.
The second role of marketing is the coordination of marketing activities in various countries to increase the skills of a company. This integration can take many forms, including the transfer of relevant experiences across national borders in areas such as global accounting management, and in the use of similar approaches or methods for market research, product positioning, or other. marketing activities.
The third critical role of marketing is detecting opportunities for research and product development. The creation of the Canon AE-1 camera is a case of purpose. The investigation provided information on the requirements that allowed Canon to develop a “world product”. Creating a physically uniform product that required fewer parts, much less engineering, fewer inventories, and longer production runs.
DECISION CRITERIA FOR SUPPLY
To make the sourcing decision it is necessary to take into account six factors:
| · Conditions and factor costs | · The labor force, this may vary from country to country; In the United States, a worker is paid more than $ 20. per hour without counting benefits that are proportional to salary, on the other hand, in Germany, VW pays up to 160% more than in the United States, but in Mexico the same company for only 15% of that 160.
· Salaries no longer represent a significant factor in competitiveness since the value of your product is much higher. The aspirations of management · The other factors are the land, materials and capital, will depend on their availability and relative abundance. Differences in factor costs offset each other in such a way that, on balance, companies have a “level playing field” in the competitive arena. |
| · Logistics | · It is the time required to fill orders, security and transportation costs.
· The greater the distance between the source of the product and the target market, the greater the time required for delivery and the cost of transportation. |
| · National Infrastructure | · A country that has sufficient infrastructure to sustain a manufacturing operation offers an attractive environment to carry out such an operation.
· This varies from company to company, but at a minimum it should include electric power, transportation and road, communications, service and component providers, a source of labor, civil order, and efficient government. · The country must offer reliable access to foreign exchange for the purchase of necessary material and components from abroad, as well as a safe environment where you can work and the product can be shipped to customers. |
| · Political Risk | · The risk of a change in government policy that has an adverse impact on the company's ability to operate efficiently and profitably is an impediment to investing in local sourcing. The lower the level of political risk, the less likely an investor is to avoid a country or market. |
| · Access to the market | · A key factor in the location of production facilities is market access. If a country or region limits market access due to local laws, balance of payments problems, or any other reason, it may be necessary to establish production facilities within the country itself. |
3.5 EXPORT AND IMPORT
When starting out, it is important to differentiate between export sales and export marketing. The export sale does not imply the adaptation of the product, the price or the promotional material to the requirements of world markets. The only element of the marketing mix that differs is “position,” that is, the country where the product is sold. This sales approach can work for some products and services; For unique products with little or no international competition, it is possible to use this type of approach. When companies grow they need to use export marketing; orients its strategies toward the customer in the context of the total market environment. The export marketer does not take the domestic product "as is" and simply sells it to international customers.For the export marketer, the product offered in the domestic market represents a benchmark, which is modified as needed to meet the needs of the international target markets. The export marketer adapts communication and distribution strategies and plans in such a way that they are appropriate for the market.
Export marketing is the integrated marketing of products and services to customers in world markets. Export marketing requires:
- An understanding of the target market environment The use of market research and the identification of market potential Decisions related to product design, pricing, distribution and channels, advertising and communications, i.e. marketing mix.
Exporting becomes more important as companies around the world make efforts to supply and service markets located outside their national borders. Research has shown that exporting is, in essence, a development process that can be divided into the following stages:
- The company does not want to export; It wouldn't even fill an export order by requesting from time to time. This is due to feeling short of time or apathy or ignorance. The company supplies infrequently requested export orders, but does not try to get more orders. This type of company would be engaged in export sales The company explores the possibility of export The company exports to one or more test markets The company has experience in exporting to one or more markets The company uses country or region-oriented marketing, based on certain criteria. The company assesses world market potential before selecting the “best” target markets to include in its strategy and marketing plan. All markets.
The probability that a company progresses from one stage to the next depends on different factors. Moving from stage 2 to stage 3 depends on management's attitude toward the attractiveness of exporting and its confidence in the company's ability to compete internationally. However, commitment is the most important aspect of a company's international orientation. Before a business reaches stage 4, it must receive and respond to requested export orders from time to time. The quality and dynamism of the management are important factors to achieve these orders success in stage 4 leads a company to stages 5 and 6. A company that reaches stage 7 is a mature company that relates global resources to opportunity worldwide.To reach this stage requires an agency with vision and commitment.
Recent studies show that successful export requires skills to handle export procedures and sufficient corporate resources.
NATIONAL POLICIES GOVERNING IMPORTS AND EXPORTS
National policies towards exports and imports are summed up in one word: schizophrenic. The nations of the world have combined two opposing political attitudes about the movement of goods and services across national borders. The countries carry out actions to promote exports through total subsidies and indirect means. The latter include tariff reductions and extensive government support programs in the area of promoting and educating producers.
The flow of products in the opposite direction, ie imports, is commonly restricted by national policy. Measures such as tariffs, import controls and a series of non-tariff barriers are developed to limit the internal flow of products. Therefore, the international situation is a combination of measures designed to simultaneously promote exports and limit imports.
GOVERNMENT PROGRAMS THAT SUPPORT EXPORTS
Any government concerned about a trade deficit or economic growth should focus its attention on educating non-exporting companies about the potential benefits of exporting. There are three frequently used government activities designed to support export activities in domestic companies.
- Tariffs: Before the Second World War, specific customs duties were charged and the tariffs of many countries, especially those of Europe and Latin America, were extremely complex. Since the war, the trend has been towards charging customs duties based on value, that is, duties expressed as a certain percentage of the value of products. Between 1959 and 1988, tariff administration was simplified through the use of the Brussels nomenclature (NAB). This nomenclature was carried out by an international committee of experts under the auspices of the Customs Cooperation Council, which organized a convention in 1955 that came into force in 1959.
Despite the progress made in simplifying tariff procedures, the task of administering a tariff represents a huge problem. People who work with imports and exports must relate to the various classifications and use them accurately. Even a rate program with thousands of items does not clearly describe every product that is sold globally. One problem is the introduction of new products and materials used in manufacturing processes generates new problems; To determine the price of a particular item, it is necessary to evaluate its use or specify its main components.
- Non-tariff barriers: it is a measure other than a tariff, which constitutes an obstacle to the sale of products in a foreign market. The five main types are: Quotas and trade controls: these are the limits or restrictions imposed by governments on the number of units or the total value of a product, or category of products, in particular that it is impossible to import. Trade distortion caused by a quota is even more severe than a tariff because once a quota has been reached, market price mechanisms are not allowed to operate Discriminatory procurement policies: these practices can take the form of government regulations and administrative regulations, as well as formal and informal business policies that discriminate against foreign suppliers.Restrictive customs procedures: k the rules and regulations for the classification and valuation of merchandise as a basis for collecting import duties can be applied in such a way as to make compliance difficult and expensive. For example, the Department of Commerce of Mexico classifies a product with a certain agreed number; the US customs could disagree. The Mexican would have to attend a hearing with US customs officials to reach an agreement. Selective monetary controls and discriminatory exchange rate policies - distorts trade in much the same way as import duties and export subsidies do. Selective monetary policies are definite barriers to trade.For example, many countries require importers from time to time to deposit an amount similar to the value of imported products, raising their cost to the final consumer. Restrictive administrative and technical regulations: These include antidumping regulations, size regulations, and safety and health regulations. Some of these are intended to keep foreign products off the market, while others are aimed at legitimate domestic targets.Some of these are intended to keep foreign products off the market, while others are aimed at legitimate domestic targets.Some of these are intended to keep foreign products off the market, while others are aimed at legitimate domestic targets.
STUDY GUIDE
- Identify the three basic targeting strategies. Provide an example of a company that has used each of them. Explain the difference between targeting and targeting. Compare the types of standardized, concentrated, and differentiated marketing. Identify and describe various criteria for sourcing. Investigate what are the national policies that govern imports and imports in our country. Mention and explain any non-tariff barrier that the US has imposed on Mexico for any product.
4. STRATEGIC MARKETING DECISIONS
First referee: "Some balls and some hits and I will name us what they are."
Second referee: "Some balls and some hits and I name them as I see."
Third referee: "Some balls and some hits but they are nothing until I name them."
Cantril
4.1 INTRODUCTION
New product design is crucial to the survival of most companies. Although there are some firms that experience very little change in their products, most companies must constantly review them. In rapidly changing industries, introducing new products is a way of life and very sophisticated approaches have been developed to introduce new products.
Product design is almost never the sole responsibility of the operations function, however it is greatly affected by the introduction of new products and vice versa. The operations function is the "receiver" of new product introductions. At the same time, these new products are limited by existing operations and technology. Therefore, it is extremely important to understand the new product design process as well as its interaction with operations.
Product decisions affect each of the operations decision-making areas, therefore product decisions must be closely coordinated with operations to ensure that this area is integrated with product design.
Through close cooperation between operations and marketing, market strategy and product strategy can be integrated with decisions that relate to process, capacity, inventories, workforce, and quality.
- Lower Production Cost, it induces us to have a better price in the market. The originality of the product is verified, that it is something new and not an imitation. The complexity of making the product. The flexibility of the production process in such a way that we must make an assortment of products.
4.2 BASIC PRODUCT CONCEPTS
What is a product? It seems like a simple question with an obvious answer. A product can be defined in terms of its tangible physical attributes; that is, by its characteristics such as weight, dimensions and materials, but any definition of a product that is limited to physical attributes offers an incomplete account of the benefits that the product offers. A seller and buyer should not overlook the intangible characteristics that a particular product may offer.
The cheaper a distribution channel seems, the less chance it has for conflict and rigidity. When evaluating the alternatives, one must begin by considering their consequences on sales, costs and profits.
The two known alternatives of distribution channels are: the sales force of the company and the producer's sales agency. As is known, the best system is the one that produces the best relationship between sales and costs.
5.2.1 IMPORTANCE OF DISTRIBUTION CHANNELS
- The benefit of place refers to the fact of bringing a product close to the consumer so that he does not have to travel long distances to obtain it and thus satisfy a need.
The benefit of place can be seen from two points of view: the first considers the products whose purchase is favored when they are very close to the consumer, who is not willing to make a great effort to obtain them. The second point of view considers exclusive products, which must be found only in certain places so as not to lose their character of exclusivity; in this case, the consumer is willing to make some effort, to a greater or lesser degree, to obtain it depending on the product in question.
- The benefit of time is a consequence of the previous one, since if the benefit of place does not exist, neither can it occur. It consists of bringing a product to the consumer at the most appropriate time. There are products that must be available to the consumer at a time after which the purchase is not made; others have to be sought for some time to ensure greater consumer satisfaction.
5.2.2 PHYSICAL DISTRIBUTION
Physical layout can be a gauge between success and failure in business. At this stage, the most important savings can be made because the exchange is facilitated through activities that help to store, transport, handle and process product orders.
Physical distribution involves planning, instrumentation, and control of the physical flow of materials and finished goods from their point of view to their places of use, in order to meet customer needs for a profit. The highest cost of physical distribution corresponds to transportation, followed by inventory control, warehousing, and order delivery with customer services.
Administrators have come to worry about the full cost of physical distribution, and experts believe that great savings can be made within this area. Wrong decisions about physical layout can lead to high costs. Even large companies sometimes make little use of modern decision tools to coordinate inventory levels, modes of transportation, and plant, warehouse, and store locations.
For example, at least part of the blame for Sears' slow growth and declining profits in recent years lies with its expensive and antiquated distribution system. Its old multi-story warehouses and non-automated equipment have made it far less efficient than its competitors. Its distribution costs represent 8 percent of its sales, compared to less than 3 percent for its close competitors like K-mart and Wal-Mart.
Physical distribution is not just a cost, but a powerful demand-building tool. Companies can attract more customers by giving them better service or lower prices through better physical distribution. Instead, they lose customers when they fail to deliver goods on time.
5.2.3 TYPES OF DISTRIBUTION
Unfortunately, no physical distribution system can both maximize customer service and minimize distribution costs. A maximum level of customer service means large inventories, the best mode of transportation, and many warehouses, all of which drive up distribution costs. Minimal distribution costs mean cheap transportation, low inventories, and few warehouses.
The company cannot simply let each physical distribution manager limit their own costs. In effect, transportation, warehousing, and order processing costs interact, often inversely. For example, low inventory levels reduce these types of costs, but also increase those that represent lack of supplies, backorders, paperwork, special production cycles and express shipments, which are more expensive. Since the costs and acts of physical distribution involve heavy transactions, decisions must be made on the basis of the entire system.
The starting point for the design of the system is the study of what consumers want and what competitors offer. The former ask for several things from their suppliers: punctual deliveries, large enough inventories, the ability to meet emergency needs, careful handling of merchandise, good service after the sale, and the willingness to return or exchange the items. defective items. For these reasons companies have to investigate the importance of these services for consumers.
A company should also examine the service levels of the competition before setting its own. Generally, you will want to offer at least the same level as the others. But your goal is to maximize profits, not sales, and therefore you must analyze the costs of providing a higher level of services. Thus, some companies offer less service, but charge a lower price; on the other hand, others provide more service than their competitors and charge higher prices to cover higher costs.
Ultimately, the company must set targets for the physical layout to guide planning. For example, Coca Cola wants to "place a Coca where it is enough to stretch out your arm to achieve your wish." Other companies go further and define tiers for each service factor.
Thus, a manufacturer of electrical appliances has defined the following service rules: deliver at least 95 percent of orders within seven days of receipt, satisfy the dealer's order with 99% accuracy, answer their questions about the status of your order within a maximum of three hours and ensure that the goods damaged during transport do not exceed 1%.
With a set of objectives the company is ready to design a physical distribution system that minimizes the cost of achieving them. The main points are: How should orders be handled (order processing)? Where should stocks be located (storage)? How much should be kept on hand (inventory)? How should the goods be shipped (transportation)?
- Service level
The number of days that pass from the moment the order is placed until the merchandise is delivered is determined by it . This system reduces the proportion of backorders at the given level. There are many elements that make up the level of customer service and some are mentioned below.
- Product Availability Out of Stock Proportion Delivery Frequencies Safety of Deliveries
Each company has a different way of determining its level of customer service, but in many cases it is determined based on the guidelines set by the competition. That is, if you offer a lower level of service, you are in danger of losing your clientele, unless there is some trade-off in your marketing mix. On the contrary, if you offer a higher level of service, your competition can also improve your level of service, which would raise costs for all companies.
The value that consumers give to the service provided to them is one of the most difficult factors to measure within the distribution channel system, but with a little skill it is possible to do so even though the decision process may be modified.
- Merchandise transports
It is an element of great importance within the physical distribution. Different communication routes are used to transport products from one city to another.
The transport system implies taking advantage of its technology, that is, taking the advantages that the physical handling procedures that the existing roads offer can offer.
Cost and transport capacity are not the only factors that must be taken into account in the transport of products, that is, for the selection of transport; Security also counts and is very important since it creates benefits of time and place for your products and has a direct impact on the availability of the same product, there are other factors that must be taken into account so that the goods are distributed efficiently.
- Product Management
It is necessary that the products are placed in a convenient way to make their handling accessible when needed; This proper movement and placement is a responsibility that falls on good material handling. It is essential to have transportation systems, vehicles, cargo elevators, etc., so that the handling of the product is sufficiently efficient.
- Management Process: To achieve the required efficiency, it is necessary to develop large, standardized and easy-to-handle containers, in which small packages can be handled for easy shipment. The protective packaging will be the one that prevents their abuse, since the items lose when they are damaged. possibility of satisfying the client's needs, at the same time that they lose usefulness. Packaging, packing and shipments have exceeded their capacity to transport, causing it to be more extensive and transport to be carried out with greater speed and above all safety. Often times the characteristics of these will determine the handling conditions, otherwise they could change even the characteristics of the products.It is necessary to have special equipment for handling the products and take into account the characteristics of the product when designing the material handling system.
- Storage
It requires a place to store the products and an inventory is maintained. Here the size, quantity and location of the storage facilities are taken into account.
- INNOVATION OF INTERNATIONAL CHANNELS
Distribution channels around the world are very different; At first glance, it seems that this difference can only be explained in terms of the culture and income level that exist in the market. However, the incidence and rate of innovation in retail channels can be explained in terms of the following four observations:
- Innovation takes place only in the most developed systems. In general, channel agents in less developed systems adapt those advances that have already been tested in more developed systems. The ability of a system to adapt innovations is directly related to its level of economic development. Certain minimum levels of economic development are necessary to support any advancement beyond the simplest retail methods.When the economic environment is conducive to change, the adaptation process can be positively or negatively affected by local demographic factors / geographic, social aspects, government actions and competitive pressures The adaptation process can be greatly accelerated by the actions of aggressive companies.
Self-service stores are an important innovation channel of the 20th century. It illustrates the four previous postulates in an excellent way. Self-service was first introduced in the US The expansion of self-service to other countries supports the hypothesis that the ability of a system to accept innovations is directly related to the world standard in more developed systems.
STUDY GUIDE
- What is a distribution channel and what is its importance? What do the three managerial criteria refer to for the selection of distribution channels? What is the importance of the physical distribution of the products? Make a conceptual map of the types of distribution that exist, taking into account the factors of service level, freight transport, product handling and storage.
6. COMMUNICATION DECISIONS
I didn't say I didn't say what I said. I want it to be clear. Romney
6.1 INTRODUCTION
Global advertising is the application of the same advertising assets, messages, art, texts, photographs, stories and video segments in markets of various countries.
Since advertising is designed to add psychological value to a product or brand, it plays a more important communication role in the marketing of consumer products than in that of industrial products. In general, products that are bought frequently and that have a low cost in the market require strong advertising support to be reminding customers of these products.
There are several reasons for the growth in popularity of global advertising. Global campaigns are testament to management's belief that unified themes not only increase sales in the short term, but help create product identity in the long term and deliver significant savings in production costs.
The potential for effective global advertising also increases as companies recognize and embrace new concepts such as "product cultures." Businesses realize that some market segments can be defined based on world demographics, rather than ethnic or national culture.
Global advertising also offers companies the economies of scale in advertising as well as the best access to distribution channels. In cases where shelf space is a priority, such as food products, a company has to convince retailers to handle its products rather than those of its competitors. A global brand that is supported by global advertising can be very attractive since, from a retailer's point of view, a global brand is less likely to stay on the shelves.
Landor Associates, a company that specializes in brand identity and design, recently determined that Coca Cola ranks number one in the United States, number two in Japan, and number six in Europe. However, standardization is not always necessary or advisable. Nestle's Nescafé is sold as a global brand, even though advertising messages and product formulation vary to accommodate cultural differences.
6.1.2 DIFFERENCE BETWEEN ADVERTISING AND ADVERTISING
The first is aimed at spreading ideas, while advertising is about helping to sell a product.
Objectives of advertising:
- Assist in the sale of a product Assist in a public relations program of the company Make known to the public any information related to the company, its items or services Fight the competition Assist in a sales promotion Ensure the correct use of a Article Create certain ideas or attitudes about the product or service Launch a new product on the market
The media used in advertising are cinema, radio, television, press, mobile advertisements (trucks, cars, subways); The medium used will depend on the product to be promoted and the type of market to which it is directed.
6.2 PUBLIC RELATIONS
They are an administrative function that investigates the opinion of the publics affected by the company. They create a good image of our company to attract the understanding and goodwill of those audiences.
Benefits of Public Relations.
- Create prestige Promote sales Prevent and solve problems of a labor nature Dispel prejudices that exist against the company Education of the public about what the company is Public opinion research Analysis and interpretation of public opinion Establishment of trends in public activity Advice on the formation of company policies Obtaining understanding and support from each of the affected publics in favor of the company.
Any company scaling up its activities outside of its home country can use public relations staff as a liaison between the company and employees, unions, shareholders, customers, media, financial analysts, governments and suppliers.
Basic public relations tools include press releases, newsletters, tours of company plants and other facilities, articles in trade and professional newspapers, company publications and brochures, presentations by company staff on talk shows. television and radio, and special events.
Many companies have internal public relations staff, while other companies prefer to hire the services of an external public relations company. Some public relations firms are associated with advertising organizations.
Independent public relations companies in the UK, Germany, Italy, Spain, Austria and the Netherlands have joined together in a network known as Globalink. The purpose of the network is to provide members with various forms of assistance such as press contacts, event planning, literature design, and suggestions for adapting global companies to local needs in a particular country or region.
STUDY GUIDE
Search the web for three advertising companies, either Mexican or foreign, and compare them between them:
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- What are the most important advertising companies on the net (3). Of the most important that you found, what benefits do they offer compared to the others? Where are they from? They have a branch in our country if they are foreigners . What are the policies to advise their clients? OPTIONAL. In case of being able to access the information, costs per product. What places do you offer to promote the market?
