International Marketing

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International Marketing

• Tim Beal
• Lecture 5
• 11 August 2005

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Today

• Housekeeping
• Impact of Technology
• transportation
• Internet
• Country Study Japan
• DVDs
• Sights and Sounds
• Changing face of Japan
• Case study Toys R Us enters Japan

3
Class Representative

• Zian Chen

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Housekeeping

• Wine assignment due FRIDAY 18 August 5.00pm
• Assignment box 1 Mezzanine floor
• penalties 2 per weekday
• Hand in to Mrs Jessie Johnston, SMIB office,
  Rutherford House 11th fl
• Errors in original spreadsheet
• Note on coursepage

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Education update

• At Victoria we define twinning as our courses
  taught through a partner college or university
  (i.e. using our intellectual property),
  articulation we would define as existing courses
  taught at a partner college or university that we
  credit towards a VUW qualification (i.e. using
  their intellectual property).
• However other universities or private colleges
  may not make this distinction or may have a
  differing definitions.
• Matthew Eglinton, International Programmes

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Education DVDs

• Copies available in Commerce Library

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Technology

• Technology affects every aspect of marketing/IM
• every good/service is produced, promoted and
  distributed by technology
• even price and payment affected
• Here concentrate on some key elements
• distribution
• internet
• two are closely connected

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Distribution

• distribution tends to be more important in IM
  than in M
• distances tend to be greater
• distance from NY to Toronto less than NY to SF
• Costs of distribution are substantial
• Falling transportation costs key driver of
  international marketing

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Transportation costs

• Silk route an example
• only very high value (expensive), non-perishable
  items feasible
• transportation revolution made global economy
  possible
• Ships gtgtgtrailways gtgtInternal combustion
  engine/roadsgtgtships (tankers/containers) gtgtair

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Example

• The cost of moving farm produce and manufactured
  goods over long distances fell 95 percent between
  1815 and 1860. With that drop, farmers could grow
  wheat in Indiana and sell it at a profit in New
  York City, while New England manufacturers could
  make work shoes and sell them to the farmers of
  Indiana

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Other technological impacts on transportation

• Can create new IM possibilities
• refrigeration
• transformed 19th century NZ
• now chilled, gas-packed meats can fetch high
  prices in affluent markets
• also happening with fruits and vegetables
• much sent by plane

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Combination

• Combination of
• cheaper
• faster
• improved storage
• greatly increases range of products that can be
  marketed internationally
• distance
• market segments

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Investment

• Development of new planes, airports, container
  terminals etc. extremely costly
• Nevertheless, new airports have been built
  recently in
• Korea (Incheon)
• Kuala Lumpur
• Hong Kong
• Japan (Kansai)
• airports around the world being upgraded
• proximity to airport important for IM business
• goods, tourism

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Globalisation of production

• Because of cheaper transport, production can be
  moved away from target markets
• US, Japan, KoreaTaiwan gtgtgtproduction shifting to
  cheaper places
• labour
• land
• environmental standards
• increases role of IM
• domestic productiongtgtgtmove offshoregtgtgtimported
  back

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Geography is history

• Internet takes this process to its limits
• Distance has little effect on
• cost
• time

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What is the internet?

• global network of computers
• origins in US defense
• gtgtuniversities
• business use very recent
• IBM survey in US
• 1994 - less 50 aware of internet
• 1999 - intricate part
• Raid growth and spread

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Growth of the Internet

• number of people/businesses online has grown
  markedly
• Internet has spread from US to Europe, NZ,
  India, ChinaNK
• Data on consumer base
• growth
• uneven spread
• Look at some recent data
• Reading Internet in Asia

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Future

• Rapid but uneven growth in users
• e-commerce - predictions vary widely

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What is Internet best for?

• Positive
• global niche
• electronic delivery
• high information content
• Negative
• low value physical product
• undifferentiated product
• local market (eg local baker)

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Examples

• Information agency
• specialised field
• with alliances offers 24 hour service
• quick turnaround (all electronic)
• Software developers
• Bangalore
• utilises relatively cheap, skilled labour
• but delivers as fast as Silicon Valley

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E-Commerce and Globalisation

• Internet (WWW) inherently global
• uneven spread of connectivity but does allow
  unprecedented access to global markets
• Still often physical constraints
• distribution
• payment systems (eg lack of credit cards in
  China)
• Global environment is complex - legal, political
  and cultural

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Global cultures and exposure

• Internet exposes companies usually to wider range
  of cultures and languages
• Few, if any, companies - even largest- have yet
  addressed challenge of multicultural, polyglot
  Internet customers
• Internet exposes companies to unprecedented
  global competition
• local bookshop - Amazon.com

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Localisation

• websites should reflect needs of customers
• language
• local currency
• local information
• Victoria International - costs calculator

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Conclusions

• Internet will grow but predications vary
  considerably
• Topography of business will change in
  unpredictable ways
• More volatile relationship between companies and
• each other
• customers
• large companies

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Internet no longer American

• Local growth and use will differ from the States
• leapfrogging
• adoption truncation
• local variation

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Leapfrogging

• follower advantage you know whats ahead so can
  cut corners
• leapfrog over old technologies into new
• ie mobile in China..
• Not many landline telephones so great growth in
  mobiles

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Adoption truncation

• in States better off, better educated males took
  lead
• uptake elsewhere more evenly spread

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Local variation

• China credit cards uncommon so payment on
  delivery
• Japan use network of convenience stores
• India Cybercafes
• use of vernacular languages will grow

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basic rule

• as elsewhere in IM
• keep asking questions
• every aspect of marketing strategy needs to be
  re-examined
• customer focus
• what does the customer wanthow do customers vary
  across the world?

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What weve covered on the Internet

• Global data growth, distribution of internet
  markets
• Globalisation
• Internet and marketing

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Japan

• 2nd (3rd) largest economy in world
• Rich and discriminating
• Cf Porter seek out the difficult customers
• ancient culture with borrowings from
  China...Germany, US
• Distribution seen as major problem
• Check out coursepage links on Japan

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DVDs

• Sights and Sounds Japan October 2004
• Shinkansen (bullet train)
• Street scenes city and country
• Temples
• Ryokan traditional Japanese inn
• Changing Face of Japan
• NZTE DVD available in main library

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Case study Toys R Us

• Getting into Japan
• Toys 'R us website
• Toys 'R Us

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Programme

• Today
• Technology, especially ICT
• Japan
• Next week
• Culture
• Country study India
• Readings
• Consumer goods and retail forecast
• Business opportunities for NZ companies in India