COMR 465 Lecture Quiz 4

Another example - GM introduced the Chevy Nova in South America

o "no va" = "it won't go" renamed to Caribe § Could been "new" but play around with phenetics o American cars seen as muscle cars, big engines, o GM to counter Toyota - started to introduce smaller cars - forte not building smaller cars - so not as good as Japanese car doesn't really go

*How does social media increase engagement?

o Allows for engagement - social media becomes part of lifestyle o Engaged because § Information § Connected - accessible (phone, computer, watch), timeless § Network - easy to find people with common ground, same interest · You segment yourself into that particular group § Dynamic § Timeliness

The international Marketing Task (image)/The comparison between international and domestic marketing?

o Comparison between international and domestic marketing - apples and oranges § Intl marketing - more grey areas, uncontrollable factors - requires local knowledge to better navigate · Ex. You are managing company - lots you can control (strategic stuff - price, value etc.) o Other half - the environment you operate in = competition actions, general regulations, overall economic condition, technological platform direct impact if you can be successful - not controllable · Ex. Open restaurant in Vancouver - regulations black and white, specific rules and criteria but when operating in diff market - rules diff and grey - diff setting altogether - diff interests, people, language, *reality - more complex · Global business can only adjust so much - ethical, marketing implications · Company wants strategy that works in domestic market and looks good in foreign market o Ex. Selling organic oranges, but other market selling normal oranges ethical implications · Lot more variables · Technology - ex. You are Netflix - underlying technology is very fundamental o Place where in early stage of development - IT is weak = lots of interruptions, unstable, not secure o Companies need to be aware of this

Rise of economic integration

o European Union § Euro used to have diff currencies - regulatory efforts to increase economic ability within certain geographic areas § NAFTA special deals within certain industries - geographic areas § Asian Pacific Economic Cooperation o *Gov find ways to compete and collaborate

4E framework (Molson CAD ex.)

o Excite customer § Create awareness/need to catch attention § Offer must be relevant to its targeted customer · Achieved by providing personalized offers § Ex. Molson CAD red refrigerator in bar in London · Catch attention, get people thinking o Educate the customer § How can you further acquire the attention - w/info that is relevant § Why do you deserve more attention? Require depth § Golden opportunity: products value proposition and offered benefits § Ex. Molson CAD - need CAD passport - associate Cad identity with brand/concept - educate customer that this Canadian/the value § Create perceived. Value o Experience the product or service § Ex. Molson cad - find CAD and open fridge and taste the beer § Info about a firm's goods and services § Stimulating real life experience o Engage the customer § Action, loyalty and commitment § Positively engaged consumers lead to more profitability · Some company's do well in differentiating but empty/ no depth/not enough specific information

Beware of international strategies (ex. Coca Cola)

o Given complexities of relationships - implementation easier said than done § Ex. Coca cola (American) - wanted to market brand in china · Found phenetics that sound like coca cola in Chinese - but can actually mean something else o Companies go abroad - more collective, more non-verbal communication = more challenges when dealing with that level of business, impact on society? Encoding and decoding, diff communication style o Issues with intl strategies - communication complex

tariff and quota and who do they benefit?

tariff - tax, artificially raises prices and lowers demand quota - max limit, reduces availability of imported goods both benefit domestically made products because they reduce foreign competition

Media sharing site Pros/cons?

*Highlight how consumers can experience *Encourage consumers to engage § Ex. Youtube very powerful § When so much information, crowded - video is a good mode of communication § Requires a diff set of resources from writing a blog - making a good video requires a lot of work § Ex. Netflix, youtube, § Pros: · Stronger tool for engagement · More interaction with customers · Customers sharing thought § Cons · Very saturated · How your message can be misconstrued (coding and decoding problem) o People only hear and see what they want to see o In complex environment - easy to lose control · People can respond - open to criticism

Antiglobals

+/- 13% are skeptical that transnational companies can deliver higher quality goods, and they don't trust global companies to behave responsibly.

Global Dreamers

+/- 23% are consumers who are less discerning about transnational companies but more ardent in the admiration of these companies. They see global brands as quality products and readily buy into the myths these brands propagate, but tend to be less concerned with issues of social responsibility

Global Citizen

+/- 50% of respondents → rely on the global success of a company as a signal of quality and innovation. They are concerned whether the companies are behaving responsibly on issues like consumer health, the environment, and worker rights.

Global Agnostics

+/- 8% of consumer populations don't base purchase decisions on a brand's global attributes.

Strategic Alliance

A strategic alliance is a formal, contractual relationship between two or more firms that share resources to pursue a common goal.Non-equity agreementVerticalFirms from different industries cooperateHorizontalFirms are from the same industry o Ex. Andrew came up to him with idea - yes good idea, always w § Can manufacture in foreign country (takes away transport cost) o A strategic alliance is a formal, contractual relationship between 2 or more firms that share resources to pursue a common goal o Non equity agreement o Vertical - firms from diff industries cooperate § You and supplier § Ex. Toyota - only buy yokahama tires o Horizontal - firms are from the same industry § You and another company that is in same level of value chain o Benefits § More core competencies § Share strength and costs o Downsides § With any relationships - conflict § Who makes decisions

**Transnational Firm: Global Marketing Strategy (sees the world as one market and create global brands)

Benefit: consistency, quality control, economies of scale, etc. o Which side will a company lead towards? o Tech companies - nature of business - mass production, efficiency, synchronization important - more standardization = better business advantage o High end firm - keep standardized (LV, Dior) § Marketing and product strategy very consistent - same style over years § Buying into the brand buying those emotions, desire, feel good, dream, so doesn't make sense to customize o Sony and Dior have succeeded in the global marketplace as well as in their domestic market o Something more functional - ex. Macdonald, pizza hut § Brand attached to it - so more multi-domestic approach

**Multinational Firm: multidomestic Marketing Strategy

Benefit: flexibility, ability to customize, diversification, etc. · Firms are segmenting the global market in diff regions o Ex. DVDs can only be played in certain places · Look at regions with enough similarities so product will have similar reactions · Companies see diff regions o Ex. French and English-speaking CAD · Want to customize based on region - give region autonomous decision-making power o Ex. Southeast Asian and headquarters in Singapore o Ex. Western European segment headquarters in London · Advantages more flexibility, more competitive · Disadvantage more costly, more arbitrage opportunity, difficult to maintain consistency

What do the SRC and ethnocentrism do?

Both the SRC and ethnocentrism impede the ability to assess a foreign market in its true light.

Social Media

Content distributed through online and mobile technologies to facilitate interpersonal interactions

Expand on this phrase: Home markets always first!

International Business Level Strategies Each business must develop a competitive strategy focused on its own domestic market. The home country of operation is often the most important source of competitive advantage Resources & capabilities established in the home country frequently allow a firm to pursue the strategy into markets located in other countries. o Business needs be successful at home first o Need competitive advantage o Do you perform above avg company in the industry? Do you make more? o Companies don't make a specific choice because interesting - but because they believe in long term - sustainable and profitable o Decision making process - grow company domestically - maximize opportunity in global market - will then go abroad - still need to compete, lower cost, pay taxes etc. o Going abroad step 1 - wining abroad step2 (need competitive advantage) § Winning abroad harder than winning at home o Ex. Want to be professional baseball player - won't start by going straight to major leagues - but start in local community - go through layers o Develop solid local advantage - foundation for developing global operation

Cultural Adjustment

Most challenging and most important while confronting international markets International marketers must: > adjust marketing efforts to cultures which they are not attuned to > be aware of frames of reference they are using in making decisions or evaluating the potential of the market an important factor in determining or modifying a marketer's reaction to situations—social and even nonsocial · Is the society more work oriented or family priority/society in which more rigid social class?? - measurable scientific way of measuring culture - unwritten communication, non-verbal communication · Does the value of the gift matter, colour?? Is it appropriate? · Seating manners, restaurant etiquette, cheer sing? · Do homework to educate yourself to balance all cultural important aspects when dealing with business relationships · *once you have awareness - can start taking appropriate actions to balance self out · In role of intl business - understanding dynamics and adjusting accordingly

Individualistic society

Strong in justice - people believe that their approach is the best approach. Expectation that someone else follows standard

Global Markets - benefits of being an intl player:

- Increased market size: especially when targeting mainstream consumers - greater returns on major capital investments or new products/processes: global market go through development stages -a competitive adv. through location (lecture) § Increased market share · Selling more = making more, producing more, cost of development decreases (per unit basis) § Greater returns on major capital investments or new products or processes · Global markets go through development stages · Ex. Selling product in Canada, reaches a point of saturation because mature but already have infrastructure and now how - use what you have and develop in diff market - allows company to leverage current investments and capabilities · Between developed and emerging markets o *Development curve shows a lot of opportunity for them o Ex. Starbucks very mature in US/Cad - not a lot of first-time buyers excited about it o New market will have lots of new, excited customers o Differences across countries = opportunity for business o If there is an opportunity today and you are not ready for it and can't capitalize on opportunity, you are a few years behind § In business - want to position yourself for the next things § Opportunities everywhere - Can you spot it and can you do something about it § In the right industry, at the right time, in the right place, with the right people § Ex. You work in this market, build connections, develop core competencies - if I did this 10 years ago but you know what you know today and take it to a market that was operating like where you are but 10 years ago § Development gaps - from business perspectives - build opportunities § Company from developed market emerging market · Yes lots of challenges but less competition § Greater economies of scale, scope or learning · Matured in one market can be "novel" somewhere else § A competitive advantage through location · Ex. Apple iPhone assembled in china - cheaper labor costs, suppliers in japan, Taiwan, south Korea - manufacturing in mainland china whole process and partnership - lots of efficiency in china as opposed to CAD · Bottomline - if companies globalizing - need to be incentivized

*Why is social media considered disruptive technology? What is disruptive technology

- a technology that has the potential to revolutionize and change market leadership -track record of putting market leaders out of business - often sacrifices performance along dimensions that are important to current customers and offers a very different package of benefits that are not (yet) valued by customers -can open up entirely new markets. (lecture) o Change status quo/ lots of stuff in marketplace - regulations, behavioural o Changed rules of the game and norms and reshuffled playing deck o Focus on stuff that is not very valuable o What was that thing that was focused on in the beginning that wasn't as acceptable by customers? § Convenience - anyone older 45 - want to touch the product, have handshake, be there in person to see what they are paying for, people brought up differently so seek diff things · Convince not seen as very good before - degree of resistance · Brought up with it = more receptive · Later convenience becomes main selling point = change in consumer behaviour o *a technology that has the potential to revolutionize and industry and change market leadership

***What Factors allow tech companies and companies in general to Internationalization faster

-Companies with either high technology and/or marketingbased resources are better equipped to internationalize than more traditional manufacturing companies -Smaller home markets and larger production capacities favor internationalization -Firms with key managers well networked internationally are able to accelerate the internationalization process o Companies that are technology based - google, apple etc. - tend to have and advantage when internalizing their operations § Tech - common language § Nature of tech - more syncronizable the better = more common ground and leverage - encourages standardization and cooperation § Tech brings more than just perceived value - increase productivity and performance § Companies have strong branding focus (starbucks, nike etc) - have advantage because they are good in marketing - understand consumer well (behaviur, psychology), need to understand market space (expectations, what they want from them) § Marketing hands on vs accounting § More weapons as they approach intl markets

more stats...

-consumers influenced by social media over holiday purchase decision -90% consumers trusted recommendations from other consumers/ 56% trust brand advertising -25% inc in sales dunkin donuts from word of mouth

hard to ignore its relevance!!

-fb 500 million active users, spent 700 bill minutes/month -twitter more than 175 mill users within 4 yrs -2 bill vid watched on YT/day (lecture) o Disruptive at the beginning o Ex. Fb - fast diffusion because synchronized technology, timing, mature platform, economics (young platform and well developed - attract lots of diff companies and engage with it) acceleration o Social media has changed buying behavior - people prefer what customers prefer over what company says about themselves § Direct impact § Need social media as part of strategy for company · Brings value even if dentist - people look online to seek out a good dentist · Reaction involves social media - ex. Choosing a restaurant · *Technology always looking for (aim for this segment) young people/early adopters - more receptive (development and economic perspective) o 19-25 yr olds

Marketing in a borderless economic world

A New Reality: Global Competition among Global Companies for Global Customers --> Global Competition Global Companies Global Consumers Emergence of Networked Global Marketplace o Global competition, consumers, regulations, norms put altogether - complex situation with pros and cons o Study: global segments by attitudes towards global products and services § Get better grasp - what are the perceptions/attitudes of global company and their commitments to corporate social responsibilities § Do they have good balance between what they want to do and what they have to do?

Going Mobile and Social/ Seven primary needs that apps meet:

Need for Me Time • Need to Socialize • Need to Shop • Need to Accomplish • Need to Prepare • Need to Discover • Need to Self-Express § 1 fundamental reason why social media is part of daily life - attracts large number of people - lots of service providers that want to tap into this § Provides that ME time - escape when stressed/break/want some time alone so addictive/easy § Ex. Retail business dying - people don't just go to mall but also for hanging out/escape · Now a days with social media - don't need to go to mall can all be done virtually § Social platform now done at the digital level § Technology needs to be mature enough - provide value § Cost-effective

Decline of Economic Protectionism

Protectionism --> quotas (limit supply) & tariffs (increase prices) --> decrease world trade o Companies can only do what they are allowed to do not just what they want to do - regulated - governed by governance o Companies selling billions abroad and manufacturing elsewhere - structured this way because they are legally allowed to (increasing sales, global market) § Allowed to and regulations allow them to (gov have more cooperative approach - mentality) § Impact demand for foreign process - tariffs and quotas · Ways to manipulate economy · Impact price - demand = manipulate market place § Bottomline - if companies can do it - gov allows it · Increasing sales in emerging markets

Self-Reference Criterion (SRC)

an unconscious reference to one's own cultural values, experiences, and knowledge as a basis for decisions. § Important for us to have awareness - can take actions to balance it out § SRC - people see what they want to see, like what they choose to like, and feel what they choose to feel · What happens is how your brain interprets diff stimulus that happens outside · We all have certain hard drive - as you attain knowledge. - starts coding in your mind ( stimulus go through eyes, go through brain and you interpret) § In business - important that we have good understanding of assumptions that shape many of us · Ex. 5/6 yrs ago prof met CEO of CAD firm abroad - in industry for 25 years - huge market and unique - very capable person - thought about connecting through social media, linkdIN to further relationship, connect on FB? Given her age and status, context that she lives - social media doesn't always come across as friendly - shows that you are not respecting that person, you are not respecting yourself that much o Instead ask to meet for a cup of coffee - then connect maybe o Question - why did he have this idea that it was okay - in his context it was okay, his assumption o But from her context it is difference o Only saw value from his assumptions - they will perceive the same way o We are all shaped by our own experiences - our subconscious o Important when dealing with people - have an awareness of their assumptions

Selling abroad is common today.. (examples)

ex. Coca cola - India/Oreos - China/ Molson CAD - EUR o International marketing - § commercialization aspect is the norm § lots of international components even if small company § more than just a relationship with you and your customers but also with the environment and stakeholders § deal with intl entity § next level - in so many ways you are doing intl marketing in domestic marketing, selling · doing lots of adjustments to model internally that reflects in international, global marketing · ex. Product customization, sales aspect § ex. Oreos in china · trying to sell concept in china not just the product but also the lifestyle · twist the cookie and dip in milk - whole process · trying to influence consumer behaviour § ex. Coca cola in india · selling brand in india · repositioning or selling product/lifestyle · *trying to commercialize products abroad o Ex. INTL students coming to UBC - signs of universities trying to commercialize products aboard *Live in very globalized world - any intl transaction is the norm

Results of study

o Global citizen segment - Majority of responders - in developing markets - china and India o Global dreamers - North America, developed markets o A lot of developing countries see value so why so skeptical - could be because info flow - making products I low cost places - low wages - doing things illegal in own country but legal there - lower moral in own market but diff actions in background markets - should be helping society involved in - high level of hypocrisy o In west we make assumptions - bombarded with Infor at young age - when no one is watching - we are allowed to do it o Provides some insight - perception people have o Ethics - normative approach - not supposed to customize - supposed to be like this as long as its my way o Why global companies - businesses doing a lot of charity abroad - is it really charity or part of business? - always marketed when abroad - need to make video, put on youtube - start connecting the dots o Perception typically drives behaviour o If this is how consumers are thinking about the brand - what do companies need to do to close the gap? o Global dreamers - people like us o Majority of global companies come from powerful economies o All aspects in equation o Purpose - findings of study - brings a lot of insight that might explain why ex. Ikea have factories and building schools - need to make video, let locals know or let us know? · Study that came out last class - investigators trying to better understand perception of diff types of global buyers - study on actions of global firms on the authenticity when they deal with CSR o Not saying that global citizens more globally conscious o Global citizens - more skeptical on authenticity on activities of global firms - translates to what they say and do which is why firms try so much harder - business trying to convince o Global dreamers - more positive outlook on what companies are doing

· Standardization vs customization

o High tech, expensive - better standardization o Seven11 convenience diff in New York than here, diff geography, social and work environment § Convenience carry diff definitions in diff markets § Better to customize

Selected US companies and the Intl Sales (table)

o Major companies - Walmart, Starbucks etc. § Lots of revenue abroad § Lots of brands in maturity stage here - consumers won't pay a premium because of the brand § Foreign markets see brand more exciting § Salaries lower in emerging markets - china, India, brazil § Majority of sales abroad

**Review Global Scale

o Marketing always dealing with brands § Global scale - very complex o Local knowledge, experience, partnerships ways companies can help themselves o Business relationships (better product - good relationship with suppliers, smooth relationship - good relationship with partners, sell more - good relationships with customers) § 2-way street § Global scale - relationships become more complex and dynamic

Why some brands are reluctant to use social media:

o Not every company selling final products = not much incentive § Ex. High end consulting o Cost and time: companies fear that social media may require too many creative staff and too much time § Not every business justifies this - don't see enough reasons to engage o Knowledge risk: senior managers are less familiar with new media, so they avoid it § Ex. Older - didn't grow with social media § Dependent on exposure o Incentive structure: advertising firms with traditional media expertise have strong incentive to maintain current fee structures § Certain skeleton - made up of infrastructure, people hired, contracts so shift to completely diff platforms take time/ obligations tied up to/ time and resources to transfer o Measurement: hard to measure direct impact on firm's performance § Not easy to quantify § Ex. Strong brand that takes years to develop - how much of it is because of brand and what is the impact (not easy to measure impact) - gives evidence but not impact o Loss of control: marketers are accustomed to taking a top-down approach to brand positioning and fear losing control of their brands § *Encoding - this is how I communicate § *Decoding - how you choose to hear it § In uncontrolled environment - company's need to be very sensitive - message may be read differently Some company's don't want to take this risk

Global Market Place and Strategy - Citibank

o Take in Rio de Janeiro, brazil o Shot of Citibank o Context - street number 1776 - American (year us became US) § Red, blue, white American flag § Taken during financial crisis - 2007 § Lots of companies had this idea that everything they did was correct, knew everything - but actually in very big trouble - verge of bankruptcies § Right side - presence in developing world tanking but presence in developing world actually booming § *Business product of environment and what you can do § As global companies - chips in different markets = diff ways to play around when situations get tough § Companies go abroad - more exposure in diff environment - diff circumstances better position § Big companies aren't in the business of having risk but managing risks

How to create ultimate engagement?

o Ultimate goal is to build relationships - what needs to be done o Model - if you want ultimate engagement certain things you need to achieve along the process § Need to earn customers time § Catch attention - get excited o Molson CAD - online strategy § Excite the customer § Red - associated with CAD - flags and values § Get people curious § Online environment so crowded - difficult § Creativity and diligence its possible o Educate the customer § This is CAD beer - looking for person with Cad passport o Experiencing the product or service § Info about a firms goods or services § Simulating real experiences § Helps you - manager - guide the mini steps to long term goal

**What are companies

o group of people working together, business - relationships - together - interactions between people § Common sense that having people that are well connected with access, local experience - adds lots of resource for any company § Once you have *quality in hiring, maintaining people - huge advantage for developing company across globe · Ex. Big companies successful - intl companies fishing diff ponds to get best people - can penetrate many markets to absorb best work force · Abilities = key advantage · Fundamentally business is about people and building relationships

How is money spent on social media diff from other platforms?

o money spent on social media, not the same as other media o but still more bang for buck than traditional media trend of spending gaged towards social media platform

engagement brings long term Benefit - long term relationships, loyalty, attachment

o not going from stranger long term loyal customer § need to go through steps o model gives insight on how to do this o use this framework to package yourself - 4E

Ethnocentrism? And what is the problem with this type of thinking?

the notion that people in one's own company, culture, or country know best how to do things. Human nature, we like to stay in comfort zone - once comfort zone yours (think this is how it should be - the norm), feeling in comfort zone - standard, better option then what is outside comfort zone - requires intentional action to get it · **Problem - creates barrier on your ability to see value I perspective of person you're dealing with it - becomes a weakness · Natural but once you get awareness that are assumptions are shaped by our realities - can start taking actions to improve this · Get opinions to get diff perspectives

To be globally aware is to have:

tolerance of cultural differences and knowledge of cultures, history, world market potential, and global economic, social, and political trends Global awareness also involves knowledge of world market potentials and global economic, social, and political trends.

Benefits of using social media

§ It is trendy leading to increase in demand in today's convenient and tech-based society · Everyone uses it · Even in high end consulting, medical service - doesn't use as much sense but not having it is a weakness/ need to be part of it to be in the game § Accessible to most companies and customers § Cost efficient to both buyer and seller · Reaches 5 million pple as opposed to paying for tv ad § Much more dynamic than previous available alternatives § Allow for better targeting and customization which brings many benefits to businesses and consumers alike · Allows back and forth communication - instant messaging · Opens field - more engagement · Segmentation, targeting and positioning - allows for very descriptive way to segment and target market o Ex. Wechat, Whatsapp

Thought sharing sites

§ Professional blogs, corporate blogs § People underappreciate the effectiveness of a simple blog § Ex. Friend started own company - had experience · What is your marketing strategy - write blogs · Turned out well she knew her customer segment well (similar to her), relevant to her, issues that concern her professional and social life builds common ground · People who reach blog - find keywords worth reading · If well designed - strong connecter · As opposed to videos can attract wrong market segment · People need to make effort of reading it - connection with intended audience

Categories of Social Media - Social Network Sites Pros/cons?

§ Pros: far greater reach *Excellent way for marketers to create excitement · Efficient and effective - good bang for buck · Can be very effective - segmentation, targeting and positioning § Cons: open to criticism - spreads quickly, associate company with negative competition · Fear of losing control if too engaged with online · How message is decoded can lead to misinterpretation · If you cant control message exposed · Too far reach inefficient because hitting wrong segment · Gossip sites - exists as a place for people to talk (online environment = everything amplified) § How can I advertise myself on social networking sites: · When you start seeing yourself as a brand and managing yourself as one · Ex. Google person who is applying for job see drinking etc. · What you show - people will have a perception · Manage yourself - huge step forward · LinkedIn only a component of social networking environment

Being common to use online platform to market yourself - what can you do to help yourself/ How will you get yourself noticed in the marketplace?

§ Using the model (creating more awareness and educating, you are the product and company is who is going to buy you) § Building personal brand - LinkdIn - job fairs, connecting, showing interest, building these connections can further build personal brand and how you will help them in their pursuit to excellence in their brand § Internships (distinguish yourself from other candidates) § Building your resume - sharing your product of what you produced § Keywords HR looking for § Show how skills relevant to employers · 1% of people get call back from online applications · Getting job is small % · Unless you really do something to be noticed and excited about you - you need to market yourself well · Some people just apply and apply for jobs in hopes of getting a job · Filmed a video of what makes her eye catching, unique story, how it impacts what you believe in and how you will address it moving forward · Without a good strategy to showcase your potential - hard to market yourself - how can I excite my customers? How can I earn peoples time? Company's have expectations - how can you be part of team? Are you manageable/coachable? Serious for next 10 years? · Online environment very crowded - not easy to get noticed · Excite then show content · Internship

If the firm is originated from a small market - some evidence suggests - firms gain special interest in being global

§ When you know your weaknesses, you develop your strengths · When you start working on them early on - turn into advantage § Ex. Korean companies - Samsung - domestic market not big enough so look elsewhere early on - build relationships, partnerships and learn early on § Review 12:20 samsung § Ex. Kid go to school in England - don't hear them saying they want to go to school somewhere else · Compared to other students from emerging markets wanting to go abroad (go to English speaking schools) § Companies can grow a lot faster than countries - can go from nothing to something big - once local environment not big enough to absorb - look to foreign markets

Collective society

§ being a part of group - more important - less justice and more stability, social acceptance · Right and wrong depends · May be an opportunity · Gap comes from lack of awareness · Point to be able to customize, need to know how, can be change for the sake of changing o To know the how - need to know the why o Why how what

**International Firm: International strategy (from its domestic market)

· *Replicate what you have in foreign markets · Makes sense - you are not successful just because you went abroad · Need skills and competitive advantage, try to win competition · Strengths become more important, make better usage of resources Benefit: consistency, leverage from domestic success, loyalty, know how, etc..

Franchising

· Apples and oranges - diff risk and reward · The legal way to copy and paste what you have, you help them at a fee · Ex. In Vancouver lululemon - sells store, carpet, specific exercise, culture Andrew sees lululemon - do you want to expand internationally? - I would like to copy and paste everything you have and I want you to support me - pay him $1,000,00 to take idea to set up in diff area with idea o But 2 conditions - whatever you sell (I want 5% royalty fee) § You are allowed to legally to copy and paste but still rightful owners - go by rules § franchising agreement · Hard for company to have so much access to international basis · Ex. Starbucks - most in North America, company owned o But international - franchisee · Benefits for franchiser o Lower risk, faster, you get benefits' · Downsides o Started as partner - but once you know everything become competitor o If you own own store - customer and consumer same person - marketing to same o **But if franchisee: consumer - person buying from franchisee o Franchisee - customer (paying) o Franchisee fees makes up majority of income The right to use a firm's business model and brand for a prescribed period of time•Franchising gives more control to the franchisorcompany over the franchiseewho has licensed the company's trademarks, products and/or services, and production and/or operation processes. •Franchisor is paid a royalty on revenue + other fees•Control is exerted through the franchise fee which can be expropriated if contracts are not adhered to, and elaborate contracts that govern the relationship between the franchisor and the franchisees. •Franchisee takes investment risk in initial setup

§ Example KFC

· Buy this for $5 - 2 bucks · China - buy this because KFC special because healthier, unconventional, foreign lifestyle, one that the singer enjoys, social influences § To be able to adjust - need to be aware - without become ethnocentric

**Why is social media so powerful?

· Connect to lots of people, reach out to subsegments · Allows to efficiently and effectively segment, target and position · The more effective the product, the more efficient the process - Competitive advantages that company's need to have · Users share particular interests and what they are looking for · Good segment - Ensure substantial, (social media is large so good) o Responsive - online good way to get hard data for cheap cost o Identifiable - you can put so much info on social media so you know consumer (buying behaviour, preference) o Provides so much data - how much you buy, what you buy = perfect description of customers · Ex. Not non for profit if making lots of money · Customers pay through our time, efforts and information · Real customers - company's using platforms to reach customers (us) o We are the fish · *Why is social media so powerful - captures majority of people nowadays, a part of lifestyle, mature technology o Fills a lot of needs on individual level: § Me time - escape § Convenient, powerful o Brick and mortar retail dying - people shopping online o Used to go to shopping mall for escape - social o Internet becomes new connecting hubs (fb, Instagram = mall) o Works - lots of incentive for all stakeholders to engage

**Direct investments

· Ex. Good idea Andrew, but I don't want to do it with you · Do everything yourself - greenfield investment (start from zero) · More difficult, risk - but bring more long term benefits · *brown field strategy, investing - ex. Andrew and him, Andrew initially has small business that is doing something similar but smaller, asks to buy you out for $1,000,000 but want to acquire for full ownership of company - take over everything Most costly & complex of entry alternatives•Methods:•Build new Facilities (Greenfield Strategy)•Buy an existing Business (Brownfield Strategy)•Achieves greatest degree of control•Potentially most profitable, if successful•Maintain control over technology, mktg. & dist.•May need to acquire expertise & knowledge that is relevant to host country.•May require hiring host country nationals or consultants at a high cost•Highest level of political, environmental, legal and financial risks

Global segments by attitudes towards global products and services (lecture)

· Global citizen o Biggest segment - 50% o People who like and trust global brands, attracted but see level of hypocrisy with approach with CSR · Global dreamers o See value of global products (tesla) but assume companies operating at higher standards - doing what they are supposed to do · Antiglobals o Only want to purchase domestically - believe in domestic products, local economies · Global Agnostics o Don't care where brand is from · Purpose of study - is there any consistent stereotype that we may be interested in?

KitKat Example

· KitKat in Japan - almost unrecognizable, diff flavors, diff market, one unique market in Japan o Why they have products there you can't find elsewhere o When STP - companies will double down- huge market, highly profitable, easy to reach, very responsive to foreign products, very identifiable customers · KitKat in USA- standard

**Exporting

· Selling abroad · Common way to enter new intl markets (low risk/great for market testing) · Preferred by small/ entrepreneurial business o No need to establish operations in other nations o Establish distribution channels through contractual relationships o No as resource incentive o Good for relationship building · May have high transportation costs · May encounter high import tariffs · May have less control of marketing and distribution · Difficult to customize product · A lot of uncertainty is contracted out · Unless you have something unique - odds are you will have lots of competition · In relationship - foreign partner is taking lots of risk - so prices need to be lower · Low margins o Simple fluctuations (ex. Currency uncontrollable) - big impact on business o Dependent on for sustainability of the brand · If works well - foreign partners benefit - earned because he took risk - looked after operation abroad (you become more of a supplier - not control of marketing, out of touch with customer) · In foreign market - policy, **regulation, taxation - can't import b/c substance in plastic that cause cancer

**Joint Venture

· Strategic alliance at more advanced level · When 2 companies join forces on equal basis and create a new entity for this specific purpose · Enable firms to share risks and resources to expand into intl ventures. It is a form of foreign direct investment o Ease of market entry o Shared risk, knowledge and expertise o Potential for synergy and competitive advantage · May experience difficulties in merging disparate cultures When two firms join and form a NEW FIRM (e.g. Sony Ericson)•Enable firms to shares risks and resources to expand into international ventures. It is a form of foreign direct investment•Ease of market entry•Shared risk, knowledge and expertise•Potential for synergy and competitive advantage•May experience difficulties in merging disparate cultures•May not understand strategic intent of partners or experience divergent goals•NOT to be confused with Strategic Alliance, which doesn't involve the creation of a new firm; therefore, less risky!