International Business LTL2035

Presentation on theme: "International Business LTL2035"— Presentation transcript:

1 International Business LTL2035
Pertti Laitinen

2 The growing importance of international marketing
Companies of all sizes have increased opportunities to enter foreign markets as goods, services, technologies and ideas move more easily across national boundaries Understanding international marketing Developing an appropriate strategy Well-designed web pages

3 Competing and/or working with enterprises in other nations
Production and research and development are being carried out in cross-national cooperative efforts Technological advances in communication and information processing have made it possible to provide a wide range of services across borders

4 International sales provide additional profits
Research and development costs can be recovered Medicines Computer consoles and games Movies aircrafts

5 Increasing range and selection of goods and services
Lower prices / better quality Better ways of doing business or new concepts (business models) Google Cirque de Soleil Ikea Apple

6 Economic health and growth of nations depend on exports
Countries that have managed to increase/maintain their exports have experienced lower levels of unemployment and higher per capita GDP/GNP growth rates

7 Reasons for the rapid growth in international Business
Technological advances and greatly reduced costs in communications Internet, e-commerce Sophisticated and diverse software which supports a wide variety of business functions Effectiveness and efficiency Lowered costs Improved products and services

8 Logistics and supply chain management
New concepts and methods Advances in information technology Major advances in physical equipment and facilities Increasing speed Efficiency Lower costs

9 Increasing rates of entrepreunial innovation and technological change
More rapid spread of New technologies Business models Strategies Ideas Meeting existing market needs Creating new demands

10 Changes in locations of economic activities and trade patterns
China a major player in consumer and industrial goods Consumer of resources and manufactured products Recipient of foreign investment Creditor country

11 India World leader in the export of services of knowledge-industry workers Economy is growing rapidly Substantial international investments

12 Lowering of barriers to trade and investment
Multilateral agreements Increasing regional integration More companies expand exports and establish production and sales operations abroad

13 An increase in all types of strategic alliances e
An increase in all types of strategic alliances e.g co-production agreements and other joint ventures The excess capacity existing in a wide range of industries

14 Turbulence in the international marketplace
The reductions in the barriers to trade have leveled the global competitive field Especially China has brought new and lower-cost competition for domestic producers Even small, local producers of handicrafts are losing market share to Chinese products

15 Meeting the intensified competition
Most companies must continuously develop new and improved products, services and/or ways of doing business in order to meet the intensified competition Continuous improvement of competitiveness Exploiting every possible competitive advantage Exploring all possible markets

16 Success in international marketing requires
Customer focus Innovations in products and services, Improvements in quality Increased efficiency with lower costs or improved service and/or better methods of doing business Identifying and exploiting appropriate market segments

17 Additional forces and problems causing turbulence
Diseases, terrorism, internal unrest in some countries, wars and threats of wars have all disrupted established trade patterns and / or raised costs

18 Pirating of goods and fakes
Counterfeit information technology products cost technology companies over 100 billion dollars per year Counterfeit drugs of poor quality, without any of the medicine indicated and/or actually containing poisonous materials, are blamed for tens of thousands of deaths Contaminated food products and other unsafe products

19 Supply chain problems caused by rapid growth of exports and imports
Ports in Asia, Europe and the US West Coast have been overloaded Inadequate railroad carrying capacity in USA

20 Restrictions on exports / imports, investments flows and ownership
The continuing loss of Industrial jobs Knowledge-industry jobs Is leading some governments, labor organisations and economists to re-evaluate economic policies This can lead to additional protectionist measures

21 The risk of expropriation
The seizure of privately owned property by a host country government with or without compensation

22 Social responsibility Public policy Environmental effects
The effects of business activity on all sectors of society are important Ethics Social responsibility Public policy Environmental effects Additional costs to some companies Savings and new opportunities to some companies

23 Factors explaining internationalization
Firm factors Company specific advantages Management interest Small size Large size niches Home country market factors Openness Domestic push International pull Host country market factors Openness Location Changes driving internationalization Global factors

24 Business activities in international marketing
Analysis of markets and potential markets Planning and development of products and services that consumers want Distribution of products through channels that provide the services demanded by purchasers Promotion of products and services – including advertising and personal selling

25 Business activities in international marketing
Setting of prices that reflect a reasonable value to the customer and bring a satisfactory profit Technical and non-technical customer support Organization structure, management and remuneration (compensation) of foreign employees

26 Major dimensions of international marketing
Exporting Importing Management of international operations Operating marketing and sales facilities abroad Establishing production, assembly or service facilities in foreign areas Creating licensing arrangements Engaging in countertrade transactions

27 Figure 1.2 Schematic model of the export marketing mix

28 Figure 1.3 Export marketing planning process

29 Demand management Attempting to increase sales
Controlling demand for some products Concerns over the environment Pressures due to increasing populations and higher income levels leading to increased consumption of limited natural resources Cost and availibility of resources (fuels etc.) Restricting supply to keep prices at desired levels (Opec) Attempts to reduce waste and increase recycling

30 States of demand Negative demand. Segments of a potential market dislike the product. Tourism in dictatorships. Marketing task is one of conversion through changes in one or more of the marketing activities.

31 No demand. Segments of a potential market are uninterested
No demand. Segments of a potential market are uninterested. The object may be perceived as having no value in the particular market, may also be an innovation, of which the market lacks knowledge. The target market needs to be stimulated by demonstrating product benefits

32 Latent demand. A substantial number of people share a strong need for something that does not exist as an actual product. The right means of satisfying that need must be developed

33 Falling demand. When the demand for a product is less than its former level and where furher decline is expected unless changes are made in the target market, product and/or marketing program. Revitalize the demand through change

34 Irregular demand. Seasonal or other fluctuations in demand differ from the timing pattern of supply.
Lowering prices in the low season/ demand Full demand. The level and timing of supply and demand are in equilibrium Follow the changes in needs and tastes / competitors

35 Overfull demand The demand for a product may be substantially greater than the level at witch the seller wants to supply it. The exporter delibarately attempts to discourage customers in general, or a certain group of customers. (Oil producing nations of the Middle East in the early 1970s.

36 Unwholesome demand. Any demand is felt to be excessive because of the undesirable qualities associated with the product. The attempt to destroy demand is generally carried out by a government agency or organized groups of concerned citizens. A company may try to destroy the demand of its own product when it has an innovation for which it wishes to develop a market.