MARKETING ACROSS BORDERS Professor Dr Demetris Vrontis

MARKETING ACROSS BORDERS

Professor Dr Demetris Vrontis Dean, School of Business President, Euro. Med Research Business Institute Editor, Euro. Med Journal of Business Chartered Marketer and Chartered Business Consultant Email: vrontis. d@unic. ac. cy Professor Dr Ivana First Assistant Professor University of Rijeka Email: ifirst@efri. hr

INTERNATIONAL MARKETING …when marketing activities take place in more than one country. The foundation for a successful international marketing program is a sound understanding of the marketing discipline.

SO, WHAT IS MARKETING? Marketing = Promotion? Marketing = Advertising? Promotion = Advertising? Marketing = Communications? Marketing = Selling? Marketing = ? ? ? what ? ? ?

WHAT IS MARKETING? Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (The American Marketing Association)

MARKETING PROCESS Identify needs and wants Know the market and the product Know your competitors Communicate realistically, authentically, be yourself Build an excellent relationship with distributors, retailers and (business) buyers Develop products to satisfy consumer requirements Provide value and quality to guarantee satisfaction

MORE SIMPLY: MARKETING IS ALL ABOUT SATISFYING NEEDS AND WANTS Needs - states of felt deprivation including physical needs for food, social needs for belonging and individual needs for self-expression. Wants - form that a human need takes as shaped by culture and individual personality. I am thirsty! I want a Coca-Cola!

Do customers have the same wants? Do they perceive things the same way? Is that culturally determined?

WHICH WOMAN DO YOU WANT TO GET TO KNOW? Bjerke and Polegato (2006): different cultures do not interpret beauty and health symbols equally

Maslow Mittelstaedt, and Hopkins (2003) discovered that social needs are the strongest motivator, followed by esteem needs, physiological needs (although somewhat modified to the working environment conditions), safety needs and self-actualisation needs.

THEREFORE Although marketing is universal, marketing practice varies from country to country. Each country is unique/different. This is true for customer needs and wants, competitive structure, channels of distribution, available media, technological advancement, political system, cultural and economical factors.

MARKETING MIX economical factors needs and wants technological advancement channels of distribution political system available media cultural factors competitive structure A firm blends a set of controllable tactical marketing tools (marketing mix = 4 P+) to produce the response it wants in the target market Product Price Good or Service Assignment of Value Place Promotion Availability of Product / Distribution Activities to Inform Consumers

PRODUCT

1. Annoyed/irrittated - why do they bother me? I paid enough for the ticket. They PROMOTION can do it themselves 2. No feelings – it is normal 3. Proud and responsible – I contribute to mother earth

PRODUCT • Why could SMART never be a US car? • Have you ever heard of visual polution? • Are wind turbins good? • Do you think they produce some kind of polution? • Is it a funny argument for you?

PRICE • Price itself – how high is it? – not cultural • Price expression (measurements USD per gallon/per liter) cultural • Discount expressions • original price – 10 EUR, discount 10%, • original price – 10 EUR, discount 1 EUR • Space for negotiation

PRICE • What is charged? • Aperol – experience or product? • Best business model? a) Fax machine is gifted but you pay provision on each copy made (0, 002 EUR/copy) – 500 000 copies expectd a year b) Fax machine is gifted but regular maintainance is charged (1000 EUR/year) – life expectancy 5 years c) Fax is sold for money (5000 EUR), maintaining is free of charge for the first 5 years

DISTRIBUTION • Where to buy fruit and vegetable? Open market or supermarkets? • What about fish? • Do people buy bread as a part of weekly shopping or daily? • What about reverse distribution?

PROMOTION

ADAPTATION, STANDARDISATION OR ADAPTSTANDATION?

Reasons Pulling Towards Adaptation 1. Market development 2. Economic differences 3. Culture 4. Customer perception 5. Competition 6. Technological 7. Sociological 8. Differences in physical conditions 9. Legal / political environment 10. Level of customer similarity 11. Marketing infrastructure Product 1. Product or service variety, design, features 2. Quality 3. Brand name 4. Packaging, styling 5. Size and colour varieties 6. Performance 7. Image 8. Pre-sales service 9. Delivery, installation 10. After-sales service, warranties Price 1. Price levels, list price, price changes 2. Discount allowance, payment period, credit terms Place Promotion 1. 1. Distribution Advertising channels, 2. Sales distributors promotion value, 3. Personal place of selling shops, 4. Direct logistics marketing 5. Public relations People Physical evidence Process management Factors Affecting the Importance of Reasons and Elements 1. Industrial sector 2. Business to business, business to consumer 3. Product/Service category 4. Places and continents 5. Entry method 6. Delegated authority to foreign subsidiaries 7. Relationship with different foreign subsidiaries 8. World-wide turnover 9. World-wide number of employees. Reasons Pulling Towards Standardisation 1. Economies of scale in production, research and development and promotion 2. Global uniformity and image 3. Consistency with the mobile consumer 4. Easier planning and control 5. Stock costs reduction 6. Synergetic and transferable experience Vrontis, 2003

RESEARCH METHODOLOGY Questionnaire survey on marketing directors of 500 companies across all industrial sectors Tactical Behaviour 1 Standardised 4 Neutral 7 Adapted Vrontis, D. (2003), “Integrating Adaptation and Standardisation in International Marketing, The Adapt. Stand Modelling Process”, Journal of Marketing Management, Vol. 19, No. 3 -4, pp. 283 -305 (ISSN: 0267 -257 X-Westburn Publishers).

ADAPTATION REASONS 1 2 3 4 5 6 7 Reasons in order of importance Culture Market development Competition Legal environment Economic differences Sociological Differences in customer perceptions 8 9 10 11 12 Technological Political environment Level of customer similarity Marketing infrastructure Differences in physical conditions Percentage 93 87 84 82 78 74 71 60 53 49 44 39

STANDARDISATION REASONS Reasons in order of importance Percentage (%) 1 Global uniformity and image 81 2 Economies of scale in production, R. &D. and promotion 75 3 Synergetic and transferable experience and efficiency 74 4 Consistency with the mobile consumer 52 5 Easier planning and control 48 6 Stock costs reduction 43

ADAPTSTANDATION Neither total adaptation nor complete standardisation represents business responses. It is suggested that companies make choices which relate to key determinants in each circumstance. Multinational companies’ tactical and strategic behaviour is integrated as a result of several reasons ‘pulling’ it towards the one or the other side of the continuum. The Adapt. Stand Process is the process of integrating Adaptation and Standardisation in international marketing tactics. This decision could only be made after an in-depth consideration of reasons pulling and factors affecting marketing behaviour.

THANK YOU FOR YOUR ATTENTION!