ULUSLARARASI İŞLETME - Deneme Sınavı - 4

Marketing mix elements, namely product, price, distribution, and communication (placement), are the tools used to implement the strategies to create value for the global or international markets and capture value from them in return.

In skimming price, the marketer sets a very high price for the product at first and then gradually decreases the price.165

Positioning is a strategy which aims to differentiate the brand in the consumer’s mind from the competitor’s brand in terms of the attributes and benefits offered by that brand.

Polycentric pricing is a price policy which assigns market-specific prices to the product.

When entered into the Ottoman market, Nestlé preferred to use the traditional promotional technique of marching through the streets on camels while music was being played.

Examples of these uncontrollable elements for the international markets include the political and legal forces, economic forces, cultural forces, competitive structures, geography and infrastructure, the structure of distribution, and the level of technology. The increase in uncontrollable elements complicates the decisionmaking processes and the implementation of marketing strategies for international marketers.

There are two main tendencies in international marketing strategy identified by similar terms: standardization versus adaptation, or globalization versus localization, or global integration versus global responsiveness (Cateora et al., 2016). Companies prefer to standardize their market offerings across different international markets in order to achieve economies of scale (Levitt, 1983). This perspective assumes that societies and markets converge in terms of their characteristics, such as similar values, tastes, lifestyles, and behavior as a result of globally operating multinational firms and the media. However, well-known global brands tailor their marketing activities to satisfy the local markets, which are shaped better by their local cultures than by those of the competitors’. For example, although Coca-Cola markets the same product range across the global markets, its advertising campaigns are tailored according to the food culture and rituals of the local markets. The Ramadan and Christmas ad campaigns tailored explicitly for Islamic and Western countries respectively exemplify this adaptation process.

Ethnoscapes are the people mobile throughout the globe, such as immigrants, tourists, guest workers. So, these mobile people always get in contact with the stable ones. Their mobility influences the politics of and between nations.

Technoscapes are the sorts of technology (high or low, mechanical or informational) spread amidst “complex relationships between money flows, political possibilities, and the availability of both low and highly-skilled labor” (Appadurai, 1990: 298).

Financescapes are the intricate movements of global capital in the form of currency markets, national stock exchanges, and speculations. Interactions of ethnoscapes, technoscapes, and financescapes are unpredictable because each of these scapes is subject to different incentives or constraints that are political, informational, and technoenvironmental.

Mediascapes and Ideoscapes have an image and narrative-based nature. Mediascapes are about the production and dissemination of information through different types of media where the boundaries between the real and the fictional blur. Mediascapes create and introduce imagined lives, places, and lifestyles.

Ideoscapes are political, and they indicate mainly the spread of the Enlightenment worldview, which consists of notions like democracy, welfare, freedom, rights, and sovereignty. The complexity introduced through global interactions eliminates the formation of a single global market.

Culture is reproduced through recurrent social relationships; it forms patterns and normalizes them; and it is internalized by the members of the cultural group. That is, culture is a dynamic concept which changes slowly as a result of the recurring social relationships. The basic characteristics of culture are as follows (Hollensen, 2017):

• Culture is learned throughout childhood. Cultural values are internalized by interacting with the members of one’s family, getting rewards or punishments, negotiating what one wants, and causing and avoiding conflict.

• Culture is interrelated within. Different parts of culture are connected, e.g., religion and marriage.

• Culture is shared. Values are passed from one member to another.

Usunier and Lee (2005) identify four significant elements of culture: language, institutions, material productions, and symbolic productions. Language helps the members of a culture to share and transmit information. It also shapes our thought patterns, our worldviews, and our behavior. Boroditsky (2011), a cognitive scientist, argues that Australian Aboriginals do not have the words for left or right in their language, and therefore their understanding of space is different from ours (Boroditsky, 2011). Institutions group people and ask them to conform to the rules in return for some rewards (Usunier and Lee, 2005). Family, political institutions, and gender are examples of social institutions defining social norms and roles. Material productions can be in various forms, e.g., artwork, intellectual productions, physical productions like tools, machines, or service productions like hospitals or media. Finally, symbolic productions determine the relationship between the physical and the metaphysical. For example, some religions ban certain food items. While the Hindu do not eat cow meat since the animal is considered sacred, Muslims have halal rules to obey.

Hofstede’s cultural dimensions are individualism/collectivism, power distance, masculinity/femininity, uncertainty avoidance, long/short-term orientation, and indulgence/restraint.

The individualism and collectivism dimension is related to the boundaries between people and groups that they belong to. In individualistic cultures, the independence of the individual is essential. In collectivist cultures group coherence and cultural harmony are more important than individual freedom. For example, in individualistic cultures, people prefer living in detached houses.

Power distance demonstrates the degree of tolerance toward the unequal distribution of power in a society (Usunier and Lee, 2005).

A society is identified as masculine when assertiveness, earning money, showing off, and lower levels of care for others are the dominant values. A feminine society is supposed to value nurturing roles, interdependence, and caring for others. For example, people in collectivist cultures share buying decisions rather than making individual decisions.

The notion of uncertainty avoidance measures how threatened people feel in certain situations. If uncertainty is high in a society, the level of anxiety and aggressiveness is high, and procedures and rules are encouraged. For example, consumers of low uncertainty avoidance prefer short payment for bills.

People of the countries with long-term orientation are more pragmatic, modest, and thrifty. Unlike these, people with short-term orientation put emphasis on consistency, and truth, religious and, nationalistic ideals are prioritized.

A great indulgence society values the gratification of human desires, pleasures, and joy unlike a high restraint society that controls the gratification of needs through social norms.

Hofstede’s cultural dimensions are individualism/collectivism, power distance, masculinity/femininity, uncertainty avoidance, long/short-term orientation, and indulgence/restraint.

The individualism and collectivism dimension is related to the boundaries between people and groups that they belong to. In individualistic cultures, the independence of the individual is essential. In collectivist cultures group coherence and cultural harmony are more important than individual freedom. For example, in individualistic cultures, people prefer living in detached houses.

Power distance demonstrates the degree of tolerance toward the unequal distribution of power in a society (Usunier and Lee, 2005).

A society is identified as masculine when assertiveness, earning money, showing off, and lower levels of care for others are the dominant values. A feminine society is supposed to value nurturing roles, interdependence, and caring for others. For example, people in collectivist cultures share buying decisions rather than making individual decisions.

The notion of uncertainty avoidance measures how threatened people feel in certain situations. If uncertainty is high in a society, the level of anxiety and aggressiveness is high, and procedures and rules are encouraged. For example, consumers of low uncertainty avoidance prefer short payment for bills.

People of the countries with long-term orientation are more pragmatic, modest, and thrifty. Unlike these, people with short-term orientation put emphasis on consistency, and truth, religious and, nationalistic ideals are prioritized.

A great indulgence society values the gratification of human desires, pleasures, and joy unlike a high restraint society that controls the gratification of needs through social norms.

Market capitalism, centrally-planned socialism, centrally-planned capitalism, and market socialism are the four traditionally defined economic systems (Keegan and Green, 2017). It is hard to identify and categorize any economic system in one of these ideals because economies transformed into hybrid forms as a result of globalization. In market capitalism, the role of the state is limited to establish competition between firms and warrant consumer protection. Production resources are privately owned. The opposite of market capitalism is centrally-planned socialism, where the state decides on what to produce and how much to produce. Consumers in this system can have access to what is available in the state-controlled market. In centrally-planned capitalism, resources are owned privately, but the state conducts resource allocation. Sweden has a centrally-planned capitalist economic system where two-thirds of all expenditures are state-controlled, and resource allocation is voteroriented. In market socialism, means of production is owned by the state or the labor, but production is not centrally planned; it is market mediated.

Levels of market development are measured according to per capita gross national income (GNI) (Keegan and Green, 2017). Low-Income Countries (LIC) have GNI per capita of $ 1,045 or less. The level of industrialization is low, and most of the population deals with agriculture or subsistence farming. Birth rates are higher than the others, but life expectancy levels are short. Literacy rates are low. Instability and unrest dominate the political environment. LICs generally have social, economic, and political problems, and international marketers generally regard them as having minimal opportunities to invest to enter and operate.

Lower Middle-Income Countries (LMIC) are the ones with per capita GNI is between $ 1,046 – $ 4,125. They have growing consumer markets, which make these countries attractive for international marketers.

Upper Middle-Income Countries (UMIC) or developing countries have per capita GNI between $ 4,126 – 12,745. Since urbanization is increasing in these countries, the number of people working in the industrial sector is also increasing, while that of those involved in agriculture is decreasing. Education systems of UMICs are reliable, and literacy rates are high. They have export-driven economies, and international marketers can face competition from local businesses.

High-Income Countries (HIC) are the ones with per capita GNI is above $12,476. Most of the time, they are conceptualized as post-industrial societies.

In sum, differentiated marketing, which refers to serving multiple market segments with different marketing mix offerings, seems to be a better alternative when serving in contemporary global markets. For example, L’Oréal is a global cosmetics company that uses a differentiation strategy very effectively. It has the L’Oréal Luxe brand line, which carries various luxury skincare, makeup, and perfume brands for millennials, whose desires and aspirations are shaped in contemporary social networks. So, these people have enough disposable incomes to spend on premium cosmetics; they belong to upper-middle and upper classes; they are young; they enjoy social networking, exclusive products, and personalized experiences. These brands that belong to the L’Oréal Luxe line are distributed through department stores, cosmetics stores, travel retails, own-brand boutiques, and dedicated e-commerce websites.

The second brand line, Consumer Products Division, offers its brands like Maybelline, Garnier, and L’Oréal Paris through retail channels like supermarkets or grocery stores.

The third type of targeting strategy is a niche or concentrated marketing. Niche marketers serve a narrowly defined market within an international market or at the global level. For example, due to the advancement of digital photography, people lost interest in analog film photography. Recently, a niche market of young consumers who prefer alternative photography techniques, tools, processes, and nostalgic aesthetics and experiences has emerged. Lomography, a brand of analog photo camera, serves for this particular and narrowly defined global market (http-2).

There are four significant motivations for firms to enter strategic alliances (Clegg, Kornberger & Pitsis, 2016: 568):

1. Transferring technology across borders more easily, 2. Accessing new markets by using the complementary resources of local firms, including distribution channels and product range extensions, 3. Leveraging specific capabilities of partners and saving costs of duplication, such as fixed costs, 4. Sharing risks among the alliance partners.

Strategic flexibility refers to an organization’s ability to respond to uncertainties by adjusting its objectives with the support of its superior knowledge and capabilities.

The diversification strategy is generally known as the riskiest strategy in the matrix. This is because, according to diversification strategy, businesses change both their product mix and their markets (Ansoff, 1957: 114). Simultaneous changes in the market and product mix cause this strategy to be known as risky. One of the main factors that determine the level of risk is how far the business departs from the existing products and markets. In other words, when pursuing the diversification strategy, if the business does not entirely leave its products and markets, the risk level would be lower. However, businesses encounter a higher level of risks when they radically diversify their products and markets.

Differentiation strategy is a strategy very different from the cost leadership strategy because it focuses on innovation and superior value creation instead of cost control.