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Unformatted text preview: See discussions, stats, and author profiles for this publication at: INTERNATIONAL MARKETING MANAGEMENT Book · September 2016 CITATIONS READS 0 643 1 author: Sergiy Spivakovskyy Higher Colleges of Technology 14 PUBLICATIONS 0 CITATIONS SEE PROFILE Some of the authors of this publication are also working on these related projects: Marketing in emerging markets View project 2018 ACBSP Region 8 Paris November 15-17, The Art of Developing Entrepreneurial Leaders View project All content following this page was uploaded by Sergiy Spivakovskyy on 09 February 2019. The user has requested enhancement of the downloaded file. KROK University Sergiy Spivakovskyy INTERNATIONAL MARKETING MANAGEMENT Manual 2016 Рецензенти: О.Л. Каніщенко, доктор економічних наук, професор (Київський національний університет імені Тараса Шевченка) О.В. Зозульов, кандидат економічних наук, професор кафедри промислового маркетингу (Національний технічний університет України «Київський політехнічний інститут») International Marketing Management: Manual / Sergiy Spivakovskyy – K.: KROK University, 2016 This manual is for the students of higher education institutions, who major in International Economics, International Marketing, International Business, International Management. In the manual are given the major concepts and principles of international marketing management with accent on their practical application. Manual is organized by Subjects. Each of them has theoretical aspects, concepts and examples, as well as questions and assignments for in-class and homework, which include multiple-choice, discussion, and debate questions. With a view for students to apply the knowledge, there are given marketing plan development and real life case studies developed based on recent Ukrainian and foreign enterprises’ international activities. The applied nature of this manual makes it a useful hand-book for both students and marketing professionals. Навчальний посібник призначено для студентів вищих навчальних закладів, які навчаються за напрямками «міжнародна економіка», «міжнародний маркетинг», «міжнародний бізнес». Навчальний посібник містить основні концепції та принципи управління міжнародним маркетингом з фокусом на його практичне застосування. Навчальний посібник складається з окремих глав, кожна з яких має теоретичні аспекти, концепції та приклади, а також питання та завдання для роботи в класі та вдома, зокрема: тестові питання, питання для обговорення та проведення дебатів. З метою застосування студентами знань, в посібнику надається опис маркетингового плану та ситуаційні вправи, засновані на міжнародній діяльності українських та зарубіжних організацій. Прикладна природа посібника робить його корисним для застосування як студентами, так і менеджерами, чия робота пов’язана з міжнародним маркетингом. Contents Introduction ............................................................................................................................................4 Lecture summary 1. Understanding international marketing management ........................................................................5 2. Developing international marketing strategies and planning...........................................................15 3. The marketing environment analysis ..............................................................................................27 4. Consumer behaviour in consumer and business markets ................................................................41 5. Managing digital technology in marketing ......................................................................................52 6. International brand management strategies .....................................................................................59 7. Dealing with competition.................................................................................................................65 8. Managing international markets’ segmentation, targeting, and positioning ....................................72 9. Managing international product strategies .......................................................................................80 10. Managing international pricing strategies ......................................................................................91 11. Managing international marketing channels ...............................................................................100 12. Managing international marketing communications ...................................................................108 13. Implementing international marketing ......................................................................................... 118 Bibliography ......................................................................................................................................126 Appendices 1. Developing marketing plan ............................................................................................................129 2. Case 1. Starbucks ...........................................................................................................................132 3. Case 2. IKEA..................................................................................................................................139 4. Case 3. Aviation of Ukraine ...........................................................................................................143 5. Case 4. BPB-Celotex......................................................................................................................150 6. Answers to quizzes.........................................................................................................................154 3 Introduction Syllabus Сourse name: International Marketing Management Course credits: 4 ECTS Prerequisite courses or concurrent courses: International marketing and sales, Marketing research, Export marketing. Learning outcome: Upon completion of the course the students will broaden their understanding of the scope and role of marketing management within the company; develop their skills in identifying marketing opportunities, defining strategic objectives, and developing grounded managerial solutions in international context. Course description: The course is intended to provide the understanding of the concept of international marketing management and the ability to make strategic marketing decisions. The course is focused on the strategic analysis and planning for developing marketing activities based on consideration of changing macro, micro, and internal environment factors. Readings: 1. Marketing Management, Philip Kotler, Kevin Lane Keller / Prentice Hall 2015, 15th ed. 2. International Marketing, Dana-Nicoleta Lascu / Textbook Media, 2013, 4th ed. 3. Strategic Marketing, David W. Cravens, Nigel F Piercy / McGraw-Hill Higher Education, 2009, 9th ed. Course outline: 1. Understanding international marketing management 2. Developing international marketing strategies and planning 3. The marketing environment analysis 4. Consumer behaviour in consumer and business markets 5. Managing digital technology in marketing 6. International brand management strategies 7. Dealing with competition 8. Managing international markets’ segmentation, targeting, and positioning 9. Managing international product strategies 10. Managing international pricing strategies 11. Managing international marketing channels 12. Managing international marketing communications 13. Implementing international marketing 4 Subject 1. Understanding international marketing management Key terms: market, need, want, demand, services, products, events, experiences, people, places and ideas, management, marketing management, offerings, brands and satisfaction, international marketing management, organisational objectives, democratic management style, autocratic management style, participative management style, laissez-faire management style, transactional and relationship marketing, marketing channels, communication channels, distribution channels, service channels, supply networks, value networks, competition, production philosophy, selling philosophy, marketing philosophy, holistic marketing, consumer markets, business markets, international markets, non-profit, voluntary, and government markets. 1. The importance of international marketing management The turbulence in the world economy we have been facing recently, restructuring of the major markets around the world, emerging markets, and their influence challenge companies to apply contemporary marketing and management practices. Marketing management is playing a key role in addressing those challenges. Marketing is a complex set of tasks as well as a philosophy of business. Marketing managers must make major strategic or long-term decisions along with tactical or short-term decisions. Strategically, they must consider which features to design into new services or products, what kind of price to offer customers, what channels to use to distribute their services and products, how much to spend on communications including advertising, sales or Internet, and which other media is most appropriate. Tactically, they must also decide on details. Together with recent processes of globalisation and regionalization, international marketing has acquired broader scope in the activities of companies, in particular in Ukraine. 2. The scope of international marketing To prepare to be a marketer in today’s global world, you need to understand what international marketing is, how it works, what is marketed, who and how manages it. A. What is marketing. International marketing Marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is ‘meeting needs profitably’. Another definition states that marketing is the process of creation, production, pricing, distribution, and promotion of customer value at a profit [25]. Marketing management is the art and science of choosing target markets, and getting, keeping and increasing customers through creating, managing, communicating and delivering superior customer value. Peter Drucker describes the process of marketing this way: ‘the aim of marketing is to know and understand the customer so well that the product or service fits him/her and sells 5 International marketing management itself. Ideally marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available’ [14]. International marketing is marketing at international markets. B. Understanding markets The creation of value is the core purpose and central process of economic exchange. Marketing managers can market seven entities: services, products, events, experiences, people, places and ideas [24]. 1. Services include such products as airlines, hotels, car hire, hairdressers and so on. Historically, businesses management theory focused on products rather than services but now there is a blurring of the boundaries between products and services. This text takes a service-dominant approach to marketing, meaning that rather than four Ps of the marketing mix, we focus on seven, including three service mix elements (process, physical evidence, and people). 2. The manufacture of physical products was the traditional cornerstone of economic activity in many countries. 3. Events like music shows, trade fairs, and football represent a form of product. 4. Experiences like theme parks can be created, staged and marketed. 5. Celebrity (people) marketing is a big business. 6. Places compete actively to attract tourists, factories, company headquarters and new residents. 7. Ideas are marketed using social marketing which uses tools and techniques of marketing to change people’s behaviour. Irrespective of which of these the manager markets, the creation of value and need satisfaction is the core purpose and central process of economic exchange. 3. What is management Management in today’s business world is demanding and will continue to be so. Economically the last few years have seen difficult times for many marketing leaders. The world economy went into a last recession in 2008 and going into another one in 2015, and businesses were and are confronted by challenging and turbulent market conditions. The globalisation of business, the financial challenges across Europe and beyond, the massive increase and spread of digital technologies, the development of supply networks spanning the globe and changing consumer needs and demands are all contemporary challenges for marketing managers. A. The process of management Management is neither an art nor a science, but is a process based on planning, organising, leading, and controlling. These four basic pillars are guided by the goals that the company needs to achieve [18]. 1. Planning is the process of establishing goals and objectives and selecting a future 6 Understanding international marketing management course of action in order to achieve them. Planning involves figuring out how to achieve the overall goals. In planning, a manager looks to the future – pointing out what they want to achieve and how they are going to achieve it. The importance of planning cannot be overstated. 2. Organising is the process of making sure the necessary human, physical, technological, financial, and informational resources are available to carry out the plan which will achieve the organisational goals. Three problems may exist with marketing departments: The marketing department lacks organisation needed to get its primary job done. The marketing staff lacks the skills or equipment to make use of the range of technologies. There is friction between marketing and the other departments in the company. 3. Leading means influencing others to achieve organisational objectives. It involves energising, directing, persuading others and creating a vision. Leadership involves many interpersonal processes: motivation, communicating, coaching, and showing people and groups how they can achieve their goals. As management is accomplishing work through people – leadership focuses on inspiring people. 4. Controlling is the focus on monitoring and measuring the outcomes or returns from the marketing mix activities. Controlling generally involves comparing actual performance to a pre-determined standard. Controlling also monitors that the plan fits the reality and that revisions are made accordingly. Controlling is closely associated with planning because planning establishes goals and the methods for achieving them. Controlling investigates whether planning was successful. B. Why management is difficult Management is complex because people and the organisational context need to be taken into account as does the fact that complexity, uncertainty and variety exist within businesses and markets. People management is the art of giving direction to people. Managing people or employees introduces major challenges. Managers must lead, motivate, inspire and encourage people. Marketing managers often have to manage people outside of their own organisations – including distributors, retailers, agencies and networks of companies. The organisational context includes the way the organisation is structured and how it operates. People and organisational context as well as external context inevitably introduce additional challenges because of their complexity, uncertainty, and variety [51]. Complexity: a large number of potentially relevant factors that may have a bearing on the intended outcomes. Uncertainty: the absence of sufficient information about the nature and likelihood of certain events that may have a bearing on the intended outcome. Variety: different and potentially unexpected events which are encountered as part of the process. 7 International marketing management 4. What is marketing management Marketing management is a business discipline which achieves goals through the practical application of marketing techniques and the management of a firm’s marketing resources and activities. Marketing management is the planning, organising, leading and control of the total company effort and the business activities designed to plan, price, process, design, manage people, promote and distribute satisfying services and products to target markets in order to achieve organisational objectives. To create an effective, cost-efficient marketing management strategy, firms must possess a detailed, objective understanding of their own business and the market in which they operate. These are the many management styles in business. Some of the main ones are: Democratic management style – In a democratic management style, the manager usually delegates power to the subordinates and leave the decision-making process to them. Autocratic management style – In an autocratic leadership style, the manager is fully responsible for making the decisions and therefore other employees are left out in the decision-making process. Participative management style – In participative management style, the manager gives his staff and subordinates the chance to be involved in the decision-making process. Laissez-faire management style – A laissez-faire manager sets the tasks and gives staff complete freedom to complete the task as they see fit. There is minimal involvement from the manager. 5. Core marketing management skills Marketing managers need a range of skills to be able to use the full expanse of techniques available to them in creative and imaginative ways, while always monitoring the financial outlays and returns needed. Some of the unique marketing management skills which are needed are the following: Managing across the organisation Managing networks, relationships, and interaction Information handling and management Understanding and managing change Analytical and creative skills. 6. Core marketing concepts Needs are the basic human requirements such as for air, food, water, clothing and shelter. These needs become wants when they are directed to specific objects that might satisfy the need. Demands are wants for specific products or service backed by an ability to pay. 8 Understanding international marketing management We can distinguish five types of needs: Stated needs (the customer wants an inexpensive car) Real needs (the customer wants a car whose operating cost, not initial price, is low) Unstated needs (The customer expects good service from the dealer) Delight needs (the customer would like the dealer to include an onboard GPS navigation system) Secret needs (the customer wants friends to see them as a savvy consumer) Responding only to the stated need may short-change the customer. A. Target markets, positioning, and segmentation Not everyone likes the same cereal, restaurant, university or film. Therefore, marketing managers start by dividing the market into segments. After identifying market segments, the marketer decides which present the greatest opportunities – which are its target markets. For each, the firm develops a market offering that it positions in the minds of the target buyers as delivering some central benefits. B. Offerings, brands and satisfaction Companies address customer needs by putting forth a value proposition a set of benefits that satisfy those needs. The intangible value proposition is made physical by an offering, which can be a combination of products, services, information and experiences. A brand is an offering from a known source. C. Value and satisfaction The buyer chooses the offerings he or she perceives to deliver the most value, the sum of the tangible and intangible benefits and costs to them. Value, is primarily a combination of quality, service and price, called the customer value triad. Satisfaction reflects a person’s judgment of an offering’s perceived performance (value) in relationship to expectations [19]. In figure 1.1 the comparison of transactional and relationship...
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