Viral Marketing Communication - Case Study Example

International Marketing Management Exam Strong international brands are more beneficial to companies than they are to customers. This is since a brand means to a company much more than getting customers as it increase the value of a company, makes acquisition of new customers easy and motivates the employees, as well as gives them a new direction. In fact, it enables customers to easily identify a company's brand over that of the competitors. It also allows companies to acquire referral businesses, as it is easy for the company's products to depend on word of mouth form of advertisement. Essentially, therefore, a brand is the sum total of the public's perception of the company's reputation, customer services, logo, and advertising. For instance, Coca-Cola has conjured up images of quality and uniqueness to the eyes of the public and many people can identify the company's products, including Fanta and Coke, due to the established brand. Developing the Coca-Cola brand is significant, as it has given the customers, as well as other stakeholders’ confidence regarding the company's full range of products and activities. The company's service package and product range fits within the corporate brand through performance and quality in addition to the consistency in packaging, customer service, advertising and packaging. This also means that Coca-Cola Company’s image is not restricted to the product branding. Grey marketing is always a problem to both distribution and pricing in international markets Grey marketing in international marketing is characterised by facilities where goods become globally circulated and known against the wishes of the copyright owner or authorised distributor or importer. They are called grey since they were marketed legally and acquired overseas although there may be doubts regarding whether theory distribution did not infringer the local copyright or trademark. In this regards, grey marketing presets a number of problems. First, grey marketing cause a problem to pricing and distribution since the goods that tend to attract grey marketers may, as well be purchased on the international market at prices that are significantly lower compared to the prices that would be charged domestically by the copyright owner's authorised distributors who enjoy quasi monopoly. At this rate, since the lower prices tend to attract the buyers or consumers more, the grey marketers will make more sales and attract a larger market compared to the authorised distributors. In regards to distribution, grey marketers may lead to oversupply of goods in some areas leading the authorised distributors to reduce the prices of their products to compete with the same products distributed by the grey marketers. Oversupply may lead to lower prices and lower revenues for the authorised distributors. ‘Born global’ and the emergence of the Born Global Emergence of born global companies like Amazon.com has changed the manner in which international businesses are conducted. This has been facilitated by the internet and globalisation. It has been facilitated by firm-specific advantages since the goal of companies such as Amazon.com is profit maximisation using efficient resource allocation. The term born global is justified. For instance, firms like Amazon.com have since their inception viewed the international market as being one market. When Amazon.com was first created, it was launched on the internet and instantly became globally. Amazon.com has maintained its global dominance since inception, which justifies the term ‘born global.’ Despite the existence of born global other methods of internationalisation still exist such as franchising and strategic alliances, that companies such as McDonald have used as means of foreign market entry. A UK manufacturer of trainers is planning to enter the Indian market. Types and sources of data the problems likely to be encountered by the company A UK manufacturer of trainers is planning to enter the Indian market. The company can obtain sources of data for foreign market entry from primary and secondary sources of data. The primary market research data should be collected directly from the foreign markets through employing surveys, phone interviews, as well as by directly contacting potential representatives and customers. Since it is tailored to a particular company and product, it would be time consuming as well as costly. Other difficulties include the cultural differences, or encountering a population that is not as used to participating in surveys as UK, or translating the surveys into various Indian languages, and possibilities of talking to marketing research personnel in India who may not be well trained. Alternatively, secondary market research techniques should be used to collect data through international news reports that have been televised, and published through print media, and on-line. Secondary data can also be collected through trade and economic statistics published in print media and online, as well as through trade agencies. The problem to be encountered would include lack of data tailored to the company’s specific niche. Factors that make international marketing more complex than domestic marketing The factors that make internal marketing more complex than domestic marketing include complex cultures, political ideologies, legal challenges, competitive environment, finding reliable partners, communication styles and distance, and time. The international markets present challenges to foreign firms due to the strange legal and political environment. For instance, a UK company expanding abroad is likely to meet countries that do not follow the English law. Additionally, the political ideologies of the host countries may not be consistent with that of the home country. Companies expanding o international markets are also likely to encounter new traditions, customs or cultures, leading to difficulties in communication to the customers or employees. The main factors affecting the decision about the mode of transport used by global companies What needs to be transported, How fast the commodities should reach the target destination the cost of transportation Where the goods need to be transported. For instance, some counties are landlocked. The value of the goods and need for insurance. Any special requirements of the consumers. Why physical distribution is a key competence for international companies Physical distribution consists of a set of activities linked to the supply of finished goods from the manufacturer to the consumers. Its competence for international markets consists of the fact that it is managed using systems approach and takes consideration of key interrelated functions to offer efficiency in movement of products. These functions are connected since decisions made in one area have significant effects on the others. For instance, a company that provides custom handbags has to ship finished products through air freight versus rail or truck so as to expedite shipment time. The significance of such a decision would make up for the cost of inventory that may be more costly. Hence, managing physical distribution using a systems approach ensures controlled costs and fulfilling customer service demands. Why an exporter might make use of a freight forwarder A freight forwarder is plays the role of an import/export agent. He is also a go-between and takes charge, moving products into and out of a country. Exporter may make use of a freight forwarder if they have a consignment of goods they need to transport from one country to the other. The freight forwarder identifies and books the best routes, selects appropriate modes of transport and helps the exporters to cut your costs by arranging for transportation of huge consignments by consolidating loads moving to one destination to minimise charges for single exporter. Viral marketing Viral marketing, which was initially a complementary tool, has taken over from more traditional methods of international marketing communication, because of the extraordinary rise of social media. Because of the increased use of social networks in connecting people, viral marketing has been able use marketing contents and to make use of network of contacts of unpaid consumers as vehicles through which the advertising campaign is carried out. It enhances the product adoption by user’s contacts and has the potential to drive sales speedily. From perspective of the customers, viral marketing makes use of fun and captivating messages to enable customers’ engagement entertainment, which satisfies the needs of customers and triggers them to share information on a company’s products. The role of differences in international product life cycles in this process Difference plays significant role international product life cycles. The product life cycle may vary from different products as well as different product categories. First, when a company modifies the target market, it is able to attract different customers and new users, which expands its revenue base. Entry into new markets also provides firms with an opportunity to expand the product life cycles of their different offerings. Five reasons why firms internationalise Firms internationalise for five main reasons. Firms internationalise due to first-mover advantage, where they consider getting into a market to acquire the market benefits as pioneers. Firms also internationalise due to the potential for growth and expansion. The small domestic market may also trigger firms to internationalise. Firms also seek to internationalise to increase their customer base. Lastly, firms may also internationalise to discourage local competitors from getting into the same space as they are. Why might grey markets turn into black ones While the grey markets are legal, the black markets are. However, when the grey market consistently violates the agreements of the distributors and copyright owners, it becomes illegal. This makes it black market. Additionally, while the black market comprises transactions outside of the formal economy, such as escaping taxes or exchange of illegal commodities, grey markets are typically concerned with counterfeiting or diverting the products. However, when the grey markets violate the law and present the buyers with illegal counterfeits (fake products), the grey market becomes black market. Methods companies employ in their distribution channels to reduce the volume of grey trade Companies may alter the pricing and products during distribution in order to punish or prevent the market activity. First, the company may ‘centralize’ pricing by setting similar price for products distributed across their international areas of business. The company may also use distribution strategies that differentiate their products across countries. For instance, they may modify the outer contours of their products during repackaging at the supply chain to make the products more aesthetically pleasing to consumers in foreign markets. This will make it more difficult for grey markets to resell the products. Companies can also increase the cost of products they transfer to their foreign subsidiaries. Hence, if a UK-based company ships commodities an affiliated foreign distributor in India, it may charge them a higher transfer price in case of concerns of the grey market ‘leaking products’ back from India to the U.S. Reference List Carida, A & Colurcio, M 2013, "Viral Marketing Communication: just sales or more?" Business Systems Review vol 2 iss 1, pp.99-108 Kotler, P 2002, A Framework for Marketing Management, Prentice-Hall, New Jersey Read More