International Marketing

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International Marketing

• Tim Beal
• Lecture 11
• 6 October 2006

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Today

• Where were at
• Dr Mustafa Farouk
• Marketing to Musims
• Integrating marketing strategies

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Where were at

• Research project due today by 5.00pm
• Guidelines and marking schedule
• Last week of tutorials
• Exam Tuesday 31 October
• Last years exam on coursepage

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Dr Mustafa Farouk

• Senior Researcher , Food Health Group , Meat
  Quality Safety Section, AgResearch Limited ,
  Hamilton
• Vice President, Federation of Islamic
  Associations of NZ (FIANZ)
• Paper on coursepage
• Also there is my estimate of Islam in global
  economy

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Highlights

• World GDP is 60,000 billion
• Muslims 20 of world population
• Islamic GDP should be 12,000 b
• By country it is 5,467 b
• I.e. Muslims are at 45 of world average
• However 5,467 billion is a huge market
• 54 times the NZ economy

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Table 1 Muslim share of population and GDP in
major economies
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Table 2 The top Islamic economies
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Integration

• Integration of the 4 Ps
• Price, distribution, product and communication
  must all fit together
• Example of Japanese entry into US car market
• 5th P politics
• Lets start with price

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Marketing approach

• Price sum of tangible and intangible value
• Objective obtain market position and share
• Position relative to other products/brands
• Share - of sales of product class
• Dynamic interacts with what competition is
  doing
• Time scale short, medium, long-term

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Integration with marketing strategy

• Pricing objectives and strategy must be
  integrated with other aspects of marketing
  strategy
• product development
• Communication

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Japanese example

• up to 1950s Japanese goods were low quality
• produced for price sensitive domestic and Chinese
  markets
• postwar period
• cut off from Chinese market because of Cold War
• access to American market

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Quality drive

• Government and business emphasised quality
  improvement
• Edward Demings statistical quality control
  embraced
• quality control circles gtgttotal quality control
  (TQM)
• Reputation (and reality) of Japanese products rose

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Low price to gain entry

• Japanese used low prices to gain entry to US
  market
• combined with attention to distribution, etc.
• Mistakes - no overnight success
• eg Toyopet

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Toyota and US market

• Toyopet - 1957
• competed with VW beetle
• Noisy engine
• interior rough
• lights too dim for California standards
• Overpriced

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(No Transcript)
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Toyota rethinks

• Toyota withdrew from market
• Market research
• Built distributor network

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Product development

• Redesigned product to fit perceived market
• Paid renewed attention to quality
• Corona established reputation for quality for
  money
• 1969 4.5 complaints/100
• 1973 1.3/100
• Toyota's milestones
• Aggressive pricing strategy

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Pricing strategy

• Initially penetration pricing
• Priced lower than the competition
• Aim to build volume, reduce costs
• Pricing only part of integrated strategy

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Integrated strategy

• Low prices gtgtdanger of building perception of low
  quality
• Japanese combined pricing strategy with attention
  to distribution, servicing availability and
  costs, and product quality
• Over time Japanese built brands
• Reputation for quality and reliability
• Moved out of price-competition market

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Japans competitors

• Japanese realised that competing on price alone
  was a dead end
• Faced with rising costs at home (labour, land,
  raw materials, energy)
• Faced with low cost competition
• especially South Korea (nowgtgtgtChina)
• Time competition became fierce they had moved up
  market
• Eg Lexus from 1983

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Toyota today

• Toyota's U.S. Sales Surge As General Motors
  Stalls - washingtonpost.com

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Integration

• Marketing strategy needs to be integrated
• Product
• Communication
• Distribution
• Price

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Next week

• DVD fresh off the press!
• Doing Business in Hong Kong (and China)
• Recapitulation of the course and everything you
  want to know about the exam