International Marketing 0

Lecture
International Marketing
Part 1
Dr. Gerhard Wagner
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ORGANIZATIONAL ISSUES
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Lecture Material

Slides, syllabus and selected literature for the lecture

are available for download from Google Drive:

https://drive.google.com/drive/folders/1N45bhzbXIY
DdXWN8WWqoRWUzlcJDUHvf
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Structure of the Lecture

Date Content

Part 1 a:
28.03.2018, Organization and Introduction: Specific Characteristics of International Marketing
18.00 - 21.00
Part 1 b:
Basic Orientations in International Marketing

Part 2 a:
29.03.2018, Homogeneity and Heterogeneity in International Markets
18.00 - 21.00
Part 2 b:
Basic Decisions in International Marketing & Foreign Market Portfolios
Part 3 a:
Market Segmentation and Market Entry
30.03.2018,
18.00 - 21.00 Part 3 b:
Operation Modes in International Markets

Part 4 a:
International Marketing Strategy and Marketing-Mix: International Product Policy
Part 4 b:
31.03.2018, International Marketing Strategy and Marketing-Mix: International Communication Policy
09.00 - 17.00 Part 4 c:
International Marketing Strategy and Marketing-Mix: International Distribution Policy
Part 4 d:
International Marketing Strategy and Marketing-Mix: International Pricing Policy
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Recommended Literature

Hollensen, S. (2014): Global Morschett, D.; Schramm-

marketing: A decision-oriented Klein, H.; Zentes, J. (2015):
approach, 6. ed. Strategic International
Management, 3. ed.,
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Further Reading

• Albaum, G.; Duerr, E.; Josiassen, A. (2016): International Marketing and Export Management, 8. ed., Harlow u.a.
• Baack, D. W.; Harris, E. G.; Baack, D. (2012): International Marketing, 3. Ed, Sage.
• Bradley, F. (2005): International Marketing Strategy, 5. ed., London u.a.
• Cavusgil, S.T.; Knight, G.; Riesenberger, J.R. (2016): International Business – The New Realities, 4. ed., Upper Saddle River.
• Czinkota, M.; Ronkainen, I. (2003): An International Marketing Manifesto, in: Journal of International Marketing, Vol. 11, No.
1, pp. 13-27.
• Czinkota, M.R.; Ronkainen, I.A. (2012): International Marketing, 10. ed., Mason, OH.
• de Mooij, M.d. (2013): Global Marketing and Advertising – Understanding Cultural Paradoxes, 4. ed., Thousand Oaks u.a.
• Doole, I.; Lowe, R. (2012): International Marketing Strategy, 6. ed., London.
• Ghemawat, P. (2007): Managing Differences: The Central Challenge of Global Strategy, in: Harvard Business Review, Vol. 85,
No. 3, pp. 58-68.
• Holtbrügge, D.; Welge, M. (2015): Internationales Management, 6. ed., Stuttgart.
• Keegan, W.J.; Green, M. (2016): Global Marketing, 9. ed., Englewood Cliffs.
• Kotabe, M.; Helsen, K. (2014): Global Marketing Management, 6. ed., Hoboken, NJ.
• Kotler, Ph.; Keller, K.L. (2015): Marketing Management, 15. ed., Upper Saddle River, New Jersey.
• Levitt, T. (1983): The globalization of markets, in: Harvard Business Review, 61. Jg., S. 92-102.
• Mühlbacher, H.; Leihs, H.; Dahringer, L. (2006): International Marketing: A Global Perspective, 3. ed., London.
• Terpstra, V.; Foley, J.; Sarathy, R. (2016): International Marketing, 11. ed., Garfield Heights, OH.
• Wagner, G.; Schramm-Klein, H.; Schu, M. (2016): Determinants and Moderators of Consumers’ Cross-Border Online
Shopping Intentions, in: Marketing ZFP – Journal of Research and Management, Vol. 38, No. 4, pp. 214-227.
• Zentes, J.; Swoboda, B.; Schramm-Klein, H. (2013): Internationales Marketing, 3. ed
 International Marketing 6

Learning Targets

Be able to analyse, select and evaluate the appropriate

management decisions connected with
international marketing:
1. Understand the specifics of international marketing
2. Know how to deal with differences and similarities
across country markets
3. Decide which country markets to enter and how
4. Apply an international marketing mix
5. Develop and apply problem solving solutions in
international marketing
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Learning “Environment”

Lecture:
→ Literature based knowledge

→ Examples
→ Cases
→ Video cases

→ Reflection
→ Group work
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Final Mark

The final mark (100 points) can be achieved through:

• active participation in the course (20 points)

• participation in a research project (30 points)

• written “case study” homework (50 points)

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RESEARCH PROJECT
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Cross-Border Shopping “Research Project”

→ Take part in a research project and earn up to 30 points (30 %)

of the final mark (100 points)

To earn 30 points you have to:

• Complete an online-survey about Cross-Border Online-
Shopping (1 point)
• Convince 29 other people to complete the survey (29 points)
• Participation code: Your Matriculation Number
• Time period: up to April, 30th

• Link: https://www.unipark.de/uc/UB-Int-Res2018/?a=
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SPECIFIC CHARACTERISTICS OF
INTERNATIONAL MARKETING
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Perspective of the World

Source: euratlas.net
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Perspective of the World: Political

Source: Geology.com
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Perspective of the World: Physical

Source: Geology.com
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Perspective of the World: Time

Source: cia.gov
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Perspective of the World: Writing Systems

Source: www.indexmundi.com/blog/index.php/2013/08/16/writing-systems-of-the-world/
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Perspective of the World: Religion

Source: p12.nysed.gov/ciai/socst/grade3/geograph.html
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Perspective of the World: Cookies

Source: https://food52.com/p/cookies-of-the-world
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Perspective of the World: Corruption

Source: Corruption Perception Index, 2016.

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Perspective of the World: GDP*

* Gross Domestic Product

Source: IMF 2015.
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Perspective of the World: Global Brands

Source: www.princeton.edu/~ina/infographics/starbucks.html
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WHAT IS INTERNATIONAL
MARKETING?
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Just a Reminder:
What is Marketing?
• „Marketing is

– the activity, set of institutions, and processes

– for creating, communicating, and delivering and exchanging

– offerings that have value

– for customers, clients, partners, and society at large.“

Source: American Marketing Association 2013.

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International Marketing Environment

Cultural
Environment

Place Product

Target
Target markets
markets

Promotion Price

Source: Terpstra/Sarathy/Russow 2006, p. 5.

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Definitions of International Marketing (1)

• „International marketing is the application of

marketing orientation and marketing techniques to
international business.”
(Mühlbacher/Dahringer/Leihs 2006, p. 38.)
• „International marketing consists of identifying,
understanding, and satisfying global customer
needs better than the competition (both domestic
and international). It also consists of coordinating
marketing activities within the constraints of the
global environment.” (Terpstra/Sarathy 2006, p. 3.)
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Definitions of International Marketing (2)

• International marketing is the process by which

individuals and companies
– identify needs and wants of customers in different
international markets;
– provide products, services, technologies and ideas
competitively to satisfy needs and wants of different customer
groups in different country markets;
– communicate information about the assets being transferred
across political and cultural boundaries;
– deliver the products and services internationally using one or a
combination of foreign entry modes.
(Bradley 2005, p. 3.)
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Characteristics of International Marketing

• Cross-border activities

• Country-specific thinking and acting

• Cross-border thinking and acting

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Not simply Domestic Marketing multiplied

Foreign Market 1
(e.g. Poland)

Home Market Foreign Market 2

(e.g. Germany) (e.g. Austria)

Foreign Market 3
(e.g. Switzerland)

Source: Zentes 1995.

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Challenges of International Marketing

Market activities in two or more international country markets

• High complexity

• Higher risks in handling of foreign markets

• Necessity to coordinate

• Extended information requirements

 High importance of decision making / managerial requirements

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Global Brands...
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...Global Marketing?
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Internationalization

• „Internationalization occurs when a firm expands its

research and development (R&D), production, selling
and other business activities into international
markets.” (Hollensen 2014, p. 53)

• De-Internationalization is „a process, determined by

external and internal factors, where the
multinational company shifts to a strategic
configuration that has a lower international
presence.”(Hollensen 2014, p. 66)
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The Internationalization of FYNDIQ

“It’s a huge milestone for us “We had a lot of
today to launch in Germany. opportunities in to which
We have always known that market to enter first but we
Sweden only was the decided to go for the
beginning and I’m proud biggest fish in the European
that we now have taken the market, Germany. Germany
first step to be the best is also the bargain hunter’s
global marketplace for stronghold with a strong
bargain hunters”, Dinesh desire for our offering.”,
Nayar, CEO & Co-founder of Dinesh Nayar, CEO & Co-
Fyndiq. founder of Fyndiq.

Source: http://ecommercenews.eu/bargain-marketplace-fyndiq-expands-to-germany/
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The Internationalization of FYNDIQ

Source: https://fyndiq.de/
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The De-Internationalization of FYNDIQ

“Our business strategy has
since built on strong growth.
But we also need to increase
our focus on our long-term
business. Our ability to
ensure this is strongest in
Sweden, where we are the
market leader and continues
to grow rapidly. We founders
have therefore decided to put
all the focus on our home
market. This means that we
are now shooting at our
commercial expansion plans
of the German consumer
market in the future.”, Fyndiq
Press Release
Source: http://www.onlinemarktplatz.de/66210/fyndiq-gibt-auf-und-stoppt-die-offensive-in-deutschland/
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Internationalization Motives
Proactive Motives Reactive Motives

• Profit and growth goals • Competitive pressures

• Managerial urge • Small and saturated domestic market

• Technology competence • Overproduction / excess capacity

• Unique product • Unsolicited foreign orders

• Foreign market opportunities • Sale of seasonal products

• Market information • Proximity to international customers

• Economies of scale • Extend lifecycle of products

• Tax benefits

Source: adapted from Hollensen 2014, p. 54.

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Internationalization Barriers / Risks

General Market Risks Commercial Risks Political Risks

• Market distance • Exchange rate • Government restrictions

• Language and culture • Payment default or fraud • National policy

• Foreign competition • Shipping delays or damage • Foreign tariffs

• Product usage • Financing • Complex documentation

• Product specifications • Cost escalation • Legal codes

• Distribution • Revolution or wars

• Insufficient knowledge

• Missing market connections

Source: adapted from Hollensen 2014, p. 66 ff.

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Case Study: SAP

Source: Perealim.kate, https://commons.wikimedia.org/w/index.php?curid=48700048

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Case Study: SAP

Questions
1. What are the main motives for internationalization
that you can identify by analysing SAP’s
internationalisation strategy?
2. Do you see any differences between the diverse
types of activities that SAP performs in its host
countries? Do motives differ by country or region?
3. How do you evaluate SAP’s desire to move their
base of operations to the United States?
Source: Morschett, D.; Schramm-Klein, H.; Zentes, J. (2015): Strategic International Management, 3. ed., Wiesbaden, pp. 99.
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BASIC ORIENTATIONS IN
INTERNATIONAL MARKETING
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Basic Orientations of International Marketing

Advantages of
globalization

high global glocal

orientation orientation

low domestic market multinational

orientation orientation

low high Advantages of

Source: adapted from Zentes/Swoboda/Schramm-Klein 2013, p. 50. localization
 International Marketing 42

Basic Orientations of International Marketing

Advantages of
globalization

high global glocal

orientation orientation

low domestic market multinational

orientation orientation

low high Advantages of

Source: adapted from Zentes/Swoboda/Schramm-Klein 2013, p. 50. localization
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Ricola “Chrüterchraft”

Source: Ricola / https://www.youtube.com/watch?v=uqMntUijbw0.

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Image Dimensions in International Marketing

Product
image
(„Brand Image“)

Company image
(„Corporate Image“)

Country image
(„Made in ...“)

Source: adapted from Zentes/Swoboda/Schramm-Klein 2013, p. 64.

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Stereotypes as Drivers in
International Marketing
• Heaven is: • Hell is:
– where the police are – where the cooks are
British, British,
– the cooks are Spanish, – the mechanics are Spanish,
– the mechanics are – the lovers are Swiss,
German, – the police German
– the lovers Italian – and it is all managed by the
– and it is all managed by the Italian.
Swiss.
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Country-of-Origin Effect

Halo effect Country Image  product feature  product review

Summary effect Experience  product feature  country image  product review

Source: Ahlert 2004, S. 19.

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Made-in-Images

„The companies of the below mentioned branches

enjoy an excellent international reputation.“
disagree agree totally
CH GBF I USA J D
automobile industry
1 2 3 4 Legend:
F GB CH USA J D D Germany
machine industry CH Switzerland
1 2 I 3 4 I Italy
I J F DCH F France
pharmazeutical industry GB Great Britain
1 2 GB 3 USA 4
J Japan
I J FCH USAD
chemical industrie USA USA
1 2 GB 3 4
I F J D USA CH Base: 3.419
banks/financial companies
1 2 GB 4 respondents
GBUSA D F J CH
watches/jewellery industry
1 2 I 3 4
CH D USA FI
textile/fashion
1 J2 GB 3 4

Source: Weiss-Richard/Kühn 2004, S. 417.

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Country-of-Origin-Images
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For what stands “Made in Romania”?

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Basic Orientations of International Marketing

Advantages of
globalization

high global glocal

orientation orientation

low domestic market multinational

orientation orientation

low high Advantages of

Source: adapted from Zentes/Swoboda/Schramm-Klein 2013, p. 50. localization
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Globalization

Source: Rolin Corporation - What is globalization (https://www.youtube.com/watch?v=xPD477FuqtY)

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Basic Orientation of International Marketing

Advantages of
globalization

high global glocal

orientation orientation

low domestic market multinational

orientation orientation

low high Advantages of

Source: adapted from Zentes/Swoboda/Schramm-Klein 2013, p. 50. localization
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Cultural Homogeneity and Heterogeneity

country
I. cultural homegeneous A
individualistic
country cluster B countries
e.g.: Europe C
X
collectivistic
Europe Y countries
Z
„Foreigners“ (e.g. Italians, Turks)
II. cultural Rhaeto-romanic speaking Swiss
heterogeneous Italian speaking Swiss
countries
e.g.: Switzerland
German speaking Swiss French speaking Swiss

Turks
Yugoslaws
III. countries having a Italians
Greeks
large percentage of
Spanish
foreign fellow citizens
other foreigners
e.g.: Germany
German

Source: Müller/Gelbrich 2004, p. 211.

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Culture-boundedness of Products
culture-free

weak Computer (Hardware) high

„High Tech”
Cameras
Heavy Machinery
Machine Tools
Consumer Electronics
Software
Durable Goods (e.g. Appliances)
Stationeries
Cultural Wine and Spirits Standardisation
Dependency Soft Drinks Potential
Tobacco/cigarettes
Clothing
Cosmetics
Detergents
Beer
Publications/media
Food
strong Confectionary low

culture-bound

Source: adapted from Müller/Gelbrich 2015, p. 294.

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Culture-boundedness of Products: Beer

(Best Selling Beer Brands Worldwide)

Source: Vinepair (Euromonitor & Corporate Records) 2015.

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Basic Orientation of International Marketing

Advantages of
globalization

high global glocal

orientation orientation

low domestic market multinational

orientation orientation

low high Advantages of

Source: adapted from Zentes/Swoboda/Schramm-Klein 2013, p. 50. localization
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Standardisation vs. Adaptation –

A Continuum

The Marketing-Components Perspective

(Full) Mixed (Glocal) Strategy

Local
Standar-
Adaptation
disation
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The Glocalization Framework

Globalization Localization
(Standardisation) (Adaptation)
100% 100%

Culturally close
Global low-cost
to consumer
production and
selling

Global roll-out
Glocal Flexible
response to
of concepts/
high speed
(Global + Local) local customer
needs

Regional and
Low local market
complexity penetration

Source: Hollensen 2014, p. 22.

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“Think global, act local (if necessary)”

Source: http://www.bme.eu.com
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Example: Glocalization Strategy of LIDL (1)

Source: Lidl.it.
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Example: Glocalization Strategy of LIDL (2)

Source: Lidl.it.
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Case: Glocalization Strategy of LIDL

What about Lidl Romania?