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Principles of Marketing - Philip Kotler

Chapter 18. International Marketing

goals

After reading this chapter, you should be able to:

1. Tell about how to affect the international marketing especially the economic, political, legal and cultural environment.

2. Describe the three entry strategies in foreign markets.

3. Explain how to adapt the marketing mix to foreign markets.

4. List and describe three types of organizational structures for international marketing.

Cold reception in Brazil, "Campbell's" soup

The firm "Campbell Soup" - the undisputed leader of the American market of canned soups. It accounts for over 80% of sales of all liquid soups in the country. But when trying to go beyond the boundary of its activity indicators were often not as impressive.

One of the first ill-fated performances firm "Campbell" took place in the UK, where the company has entered the market in 1960 with its famous red-and-white banks concentrated soup and advertising thematically repeating advertising in the United States. As a result, this company has turned a loss for the company to $ 30 million The reason:.. American consumers have seen little jar next to the big banks English unconcentrated soups and drew the conclusion that the soup "Campbell" is very expensive. He did not realize that the soup "Campbell" - a concentrated and diluted with water, is actually cheaper than others.

In 1978, the firm "Campbell" was published in the Brazilian market, creating a mixed venture with a local company and giving it $ 6 million.. Firm "Campbell" At this time, offered mainly myasoovoschnye soups in very large banks, with the usual red -White label. Initially sales satisfactorily, but then fell. Three years later, after spending 2 million. Dollars. On advertising campaigns, the firm "Campbell" has decided to curtail its retail operations in Brazil.

What did not work this time? From subsequent interviews Brazilian housewives firm found that by feeding the family soup, in which the preparation is no role, a woman felt frustration as a housewife. Women preferred to buy dry soup mix firm "Knorr" and "Maggie" and cook the soup, adding to it their own components and giving it its own flavor and taste. Soup "Campbell" bought only a safety net in emergency situations, when I had to make something very quickly. Obviously, before leaving the Brazilian market firm "Campbell" is not carried out sufficiently deep market research.

The inability of the firm "Campbell" to understand the specifics of the foreign market for their goods is typical for many other American firms. A few months after the failure to "Campbell" company Brazilian market on the termination of its activities in Brazil, announced the company "Gerber", which eight years trying to achieve a return on sales of products for baby food. Obviously, the Brazilian housewife was not considered ready baby food worthy substitute for fresh food, cooked by themselves or living in a house maid. Ready packaged baby food they may have acquired only when traveling to stay with relatives or otdyh1.

Large capacity of the US domestic market and the experience of marketing failures abroad serve as an explanation of why many US firms, avoiding to engage in an aggressive international marketing, preferring to marketing on the domestic market marketing in foreign markets. Engage in "home" marketing easier and safer. The Manager does not have to learn a foreign language, to deal with an unfamiliar currency to deal with the political and legal uncertainty, and even with the need to adapt the product to meet consumer needs and unusual requests.

To engage in the international marketing of US firms encouraged by two factors. Firstly, they can push for this weakening of the marketing opportunities or changing market conditions in the domestic market. There may be a slowdown in the growth of gross national product, conducting anti-business government policies, the introduction of the excessive tax burden, a boost state entrepreneurs to exit abroad in order to increase foreign exchange earnings and the reduction of the foreign trade deficit USA2. Second, US firms can be involved in foreign trade growth opportunities that are opening up for their products in other countries. Without going to the domestic market, they can find for themselves and attractive foreign markets, despite the additional costs and problems in connection with operations abroad.

In 1982, US exports amounted to 11.5% of the gross national product US3. In absolute monetary terms, this figure makes the United States the world's largest exporting country. Other countries involved in world trade to a much greater extent. So, to maintain a high level of employment and payment of imported goods the UK, Belgium, the Netherlands and New Zealand have to sell abroad more than half of their products. For companies in these countries international marketing - this is their second nature.

Some US and foreign companies engaged in international marketing with such a large scale that they can be called transnational corporations. Among US companies, received in 1982 more than 40% of its revenues from abroad, were "Exxon" (75%), "Texaco" (69) "Citicorp" (67) "Mobile" (61) "Caterpillar tractor" (57) "Dow Chemical" (52) "IBM" (45) "Coca-Cola" (43) and the "Xerox" (42%). American firms oppose such formidable multinational competitors as concerns "Royal Dutch Shell", "British Petroleum", "Unilever", "Philips", "Volkswagen", "Nippon Steel", "Siemens", "Toyota Motor" and "Nestle ".

Along with the aggressive expansion of some American firms abroad to the US domestic market we have got a lot of foreign companies. Their names and the names of their branded goods in the United States have become everyday words: "Sony", "Honda", "Dattsun", "Nestle", "Perrier", "Norelko", "Mercedes-Benz", "Volkswagen". And many Americans give it preference over domestic brands. In addition, there are many alleged American-made goods produced in reality foreign multinationals. This book "Bantam" ice cream "Baskin-Robbins" records "Capitol" shoe polish "Kiwi" tea "Lipton". This is also the department store "Saks Fifth Avenue". America also attracted huge foreign investment in the tourist industry and in real estate. First of all we are talking about the purchase of land by the Japanese in Hawaii, construction Kuwait resorts off the coast of South Carolina, the acquisition of office buildings in Manhattan by Arab merchants and Sheikh offer from Saudi Arabia to buy his son a historic fort Alamo near San Antonio Texas.

The question may arise, not whether the activity involves the use of international marketing of some new principles. It is obvious that the principles of setting marketing objectives, selection of target markets, definition of marketing positioning, the formation of the marketing mix and the marketing of control remain in effect. All of these principles are not new, but the differences between countries can be so deep that the figure in the international market should be able to understand in a foreign environment and foreign institutions, and be prepared to revise the fundamental concepts of how people react to incentive marketing techniques.

The following sections of this chapter we will look at six major decisions to be taken by the company, plans to do international marketing (see. Fig. 91).

Fig. 91. Key decisions in the field of international marketing