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TAPPING INTO GLOBAL

MARKETS

Group 8
Nugraha Ngesti Wibowo
Suhartanto
Vina Octaryna

Major Decisions in International


Marketing
Deciding whether
to go abroad
Deciding which markets
to enter
Deciding how to
enter the market
Deciding on the
marketing
program

Deciding on the
marketing organization

Deciding Whether to Go
Abroad
Better profit opportunities
Needs a larger customer
Reduce dependence on one
market
Counterattack global
competitors
Customers are going
abroad

Four Stages of The


Internationalization Process

No regular
export
activities

Export via
independent
agents

Establish
sales
subsidiaries

Establish
production
facilities
abroad

Deciding Which Markets to


Enter
The
waterfall
approach

The
sprinkler
approach

Gradually entering countries in sequence.


Mode entry : sequential ( Hi-touch, food )
It allows firms to carefully plan expansion and is
less likely to strain human and financial
resources
Entering many countries simultaneously
Mode entry :simultan ( Hi-tech, electronic )
It better when first-mover advantage is crucial
and a high degree of competitive intensity
prevails

Choose the countries based


on

Income &
Population
Product &
Geography

Political
Climate

Key Emerging Markets


Indonesia
China
Brazil

India
Russia

South
Africa

Regional Free Trade Zones

ASEAN

APEC

NAFTA

MERCOSUL
European
Union

Desired Country
Characteristics for Market Entry

Rank high on
market
attractivenes
s

Rank low in
market risk

Possess a
competitive
advantage

Deciding How to Enter the


Market

Five Modes of
Entry into
Foreign
Markets

Indirect Exporting

Domestic-based export merchants


Buy the manufacturers products and then sell them
abroad

Domestic-based export agents


Including trading companies, seek, and negotiate
foreign purchase for a commission.

Two advantages:

Less investment & less risk

Direct Exporting Methods


Domestic-based export department
A purely service function may evolve into a self-contained
export department operating as its own profit center.

Overseas sales branch or subsidiary


The sales branch handles sales and distribution and perhaps
warehousing and promotion as well.

Traveling export sales representatives


Home-based sales representatives travel abroad to find
business.

Foreign-based distributors or agents


These third parties can hold limited or exclusive rights to
represent the company in that country.

Licensin
g

The licessor issues a license to a


foreign company to use a
manufacturing process, trademark,
patent, trade secret, or other item
of value for a fee or royalty

Joint
Ventures

Foreign investors joined local


invetors with share ownership and
control

Direct
Investm
ent

The foreign company can buy part


or full interest in a local company or
build its own manufacturing or
service facilities

Globally Standardized
Marketing Pros & Cons
Advantages

Disadvantages

Economies of scale

Differences in consumer needs,


wants, usage patterns

Lower marketing costs

Differences in consumer response


to marketing mix

Power and scope

Differences in brand development


process

Brand Consistency

Differences in environment

Leverage ideas quickly and


efficiently
Uniformity of marketing
practices

Cultural Dimensions

Individualism vs. collectivism


High vs. low power distance
Masculine vs. feminine
Weak vs. strong uncertainty
avoidance

What Marketing Aspects Might Be


Adapted for International
Marketing?

Product features

Labeling

Colors

Materials

Sales promotion

Advertising media

Brand name

Packaging

Advertising execution

Prices

Advertising themes

The Ten Commandments of


Global Branding
Understand the global branding
landscape
Avoid shortcuts in brand building
Establish a marketing
infrastructure
Embrace integrated marketing
communications
Establish brand partnerships

The Ten Commandments of


Global Branding (cont.)
Balance standardization and
customization
Balance global and local control
Establish operable guidelines
Implement a global brand-equity
measurement system
Leverage brand elements

Five International Product and


Communication Strategies

Levels of Product
Adaptation
Production of regional product
versions
Production of country versions
Production of city versions
Production of retailer versions

Price Choices

Set a uniform price everywhere


Set a market-based price in each
country
Set a cost-based price in each
country

What is a Gray Market?

A gray market consists of branded


products diverted from normal or
authorized distributions channels in the
country of product origin or cross
international borders; dealers in lower
priced countries sell products in higher
priced countries

Whole-Channel Concept for


International Marketing
Seller
International headquarters
Channels between nations
Channels within nations
Final buyers

Country of Origin Effects

Building Country Images


Consumer Perception of Country
of Origin

The Marketing
Organization
Export Departments
International Divisions
Global Organization

INDOMIE

1971

Indofood
established as PT.
Panganjaya
Intikusuma

1972

Indomie first
appeared as the first
instant noodles in
Indonesia

1990

Establish a joint
venture with SevenUp Netherlands BV
(51:49), an affiliate
company of PepsiCo
Inc. to enter the
snack food industry
(the joint venture
has been transferred
to ICBP in 2010 as
part of the
restructuring of the
Group CBP)

1994

Renamed become
PT Indofood
Sukses Makmur
Tbk

1995

Acquired Bogasari

1997

Acquired 80% stake


in group companies
engaged in
plantations,
agribusiness and
distribution.

2004

Acquired 60%
stake in the carton
packaging
company.

2005

Formed a joint
venture with Nestl
SA for marketing
culinary products.

2006

Acquired 55.0%
stake in shipping
company, Pacsari
Pte. Ltd. ("Pacsari").
Acquired several
companies
plantation in West
Kalimantan.

HISTOR
Y

ABOUT

INDOMIE
1982
Fried noodlea were first made, Fried noodles now sold
in more than 50 countries worldwide.
2011
Indofood produces about 11 billion packs of instant
noodles for the domestic and export markets.
Indomie is ranked number 1 and 2 in Ramen Rater Top
Ten Instant Noodles.
Indonesian distinctive flavor can be so universally
accepted.

INDOMIE
PENETRATION
IN NIGERIA

Target Market
Selection
Nigeria is a country that
has the highest score in
the per capita income
aspects, population,
competition, and political
risk compared to other
countries in Africa that
Indomie decided to make
Nigeria as an export
destination and joint
ventures with companies
Dufil.

The official name of the country: the Federal


Republic of Nigeria (Federal
Republic of Nigeria), composed
of 36 states and one Federal
Capital Teritory (FCT)
Total area: 923 768 km2
Layout & Conditions Geo .:
4 LS, LU and between 3 14 - 15 BT.
North: desert
Middle: grasslands with rocks
South generally swamp
Border Country:
U: Rep. Niger S: Gulf of Guinea / Atlantic
Ocean
Q: Rep. Cameroon and Rep. Chad B: Rep.
Benin
Climate: Tropical (rainy season and dry

NIGERI
A

Social and Cultural


Education
Consists of 250 ethnic:
North ethnic
- Hausa / Fulani 29%
- Kanuri 4%
Ethnic the south / west
- Yoruba 21%,
ethnic east
- Igbo 18%
- Ijaw 10%
- Ibibio 3.5%
- Tiv 2.5%.
Health
Rank-2 of people living with
HIV / AIDS worldwide, ( 2.6
million people)
Outbreaks of disease
Cholera, Meningitis, Yellow
Fever, Malaria, diarrhea,
typhoid and Avian Flu

Basic Education (Primary


Education) 6 years.
Secondary Education
(Junior Secondary School
and Senior Secondary
School), 6 years old.
Academy / Polytechnic and
the University of 4 years.
Assisted by the World
Bank, UNESCO, UNICEF,
USAID / DFID, ADB, the
Government of Japan and
Security
JICA.
Low security level
prone to conflict,
especially the northern
and eastern regions.

Economy

Analisis
StrengthNigeria Food Industry SWOT
Weakness
With a rapidly increasing
population, Nigeria has the
dynamic potential consumers
The increasing purchasing power
of the middle class will increase
the food industry
Nigeria produces a number of
local primary agricultural crops
and the fourth largest in the
world cocoa farmers.

Per capita food consumption is


still very low.
Regulation of Nigeria is very
weak.
Low level of security.

Opportunities

Threat

Per capita food consumption is


expected to grow very strongly
over the coming years.
Investments into the food
industry can strengthen internal
trading system, in addition to the
wider range of consumer goods
can reap wider consumer.
The high level of consumer

Competition from regional


countries with a better business
environment, such as Ghana,
Nigeria can look lost on foreign
direct investment.

SWOT

Choosing
The Mode of Entry
Market size and growth:
2013 consumption of instant
noodles for 350K-400K
tons / yr
Indomie: 200K tons / yr
market share of 70%
Internal Resources, Assets,
and Capabilities : 90%
materials product take from
Nigeria

EXPORTING
In 1988

JOINT VENTURE

Bisnis Unit of Tolaram


Sector

Geography

Digital services
Distribution
Energy
FMCG
Infrastructure
Paper
Real estate
Textile

Estonia
Ghana
Indonesia
Nigeria
Singapore

Dufil Prima Foods PLC (www.dufil.com)


o Is the result of cooperation entities Tolaram Group and the Salim Group,
which exclusively manufactures and markets INDOMIE, under a PT Indofood.
o Indomie instant noodles become a market leader in West Africa
o There are 3 locations manufacture of Indomie in Kaduna, Ota and Port
Harcourt
o Also produce flour, seasoning, packaging and palm oil to meet the instant
noodle production kebuthan
o Dufil business venturing pasta and cooking oil with brand Power Pasta &
Power Oil

2012 The third


plant with most
advanced
automatic
machines
in Kaduna

2001 second plant


Choba, Port
Harcourt, Rivers
State

1988

1995 The first


factory in Ota
Ogun State
The first noodle
factory Nigeria
and the largest in
Africa

2012 awarded
'Most Trusted
Brand'
in Nigeria

Currently
controls + 70%
market share
Growth per year
40%