Podcast Summary

This is a summary of the key points from the transcript:

  • The speaker advocates using classical marketing frameworks like Porter's 5 Forces, Diamond Model, and Value Chain when teaching international marketing, as these models are still highly relevant despite the rise of digital marketing.
  • He emphasizes the importance of understanding cultural and decision-making differences between markets, as these can vary greatly. For example, in some cultures, family and social networks play a key role in purchasing decisions.
  • The speaker discusses how technology and data analytics can be leveraged for international marketing, such as using IP tracking and browsing patterns to identify potential customers. However, he notes the importance of balancing the use of such technologies with privacy concerns.
  • For marketers looking to expand internationally, the speaker recommends starting with an analysis of one's existing business and product strengths, followed by an assessment of promising target regions using frameworks like PEST analysis. This can help identify any unique factors or advantages in a given market.

 

Transcript

Transcripts are auto-generated

 

Announcer (00:01):
This is the Cambridge Marketing Podcast, exploring the world of international marketing

Nandan Sengupta, International Marketing Tutor (00:06):
In the advertisement, visual in the marketing communication. They seldom show a couple or an individual, they always show a family, I believe, going into the cultural elements, understanding the way people make decisions and the way it gets changed. This is the Cambridge Marketing Podcast.

Kiran Kapur (00:28):
Hello and welcome. This week we are in the world of international marketing and I'm delighted to welcome Nandan. Sengupta, who is Senior Lecturer and Director of Studies at Anglia Ruskin University, otherwise known as ARU, and also a longtime tutor at the Cambridge Marketing College. Nandan welcome. International marketing is something we don't talk enough about. I think it's all very easy for marketers to get very sort of stuck into their own cultural areas in their own marketplaces. So when you are teaching this, how do you encourage people to think about international marketing?

Nandan Sengupta, International Marketing Tutor (01:06):
First of all, it depends on which level I'm teaching at, because I teach from level four to the high level. Initially I asked them, my students to consider the basic frameworks, the classical marketing frameworks. Those have been working since ages properly, and the reaction I generally receive from the students is that, look, this is digital marketing these days and those things don't work, but I tend to believe those things still work and I tell them that. So I ask them to learn those things, understand those things. And then of course the contemporary marketing as they call it, not just digital marketing, that part involves application of technology, but the question is application on what is it on people's mind frame? Is it on your marketing platform? Is it on your content? And how so should be able to do that? What and how thing? I suppose we really need to put our feet on the ground that is the classical formations and frameworks, which is still working in my opinion.

(02:26):
So that's how I start. And then I go into, I should say multiple directions, not only, one after the other. Initially the framework, like Five Forces Model, Diamond Model, even Value Chain. Then when I come into the marketing, I generally start with STP, segmentation, targeting and positioning, and the moment I start talking about segmentation, at that very point, technology kicks in because we don't do segmentation like we used to do, let's say 20 years back or 30 years back. So there I bring in all sorts of technology, right, from HubSpot kind of technology to AI based or metaverse based thing is, so that's how generally approach the whole subject. I don't know if that answers your question.

Kiran Kapur (03:19):
Absolutely it does. You've several times talked about classical frameworks and you've mentioned a few. So you mentioned the Porters Five Forces Model Now that can be quite contentious. Now there's a lot of marketers that go that's not really relevant anymore. So really intrigued that you've think it is relevant. So can you just briefly explain what we're talking about for any listeners not used to the model and then why you think it's relevant in an international marketing context?

Nandan Sengupta, International Marketing Tutor (03:46):
Of course. Because these five elements, I really don't think, I mean I'm not one to challenge Mr. Porter, of course not, but I prefer to call it more like a four element model because the fifth one is the competitiveness, the fierceness of the competition of the market, which is probably a resultant of the four other elements. And those four other elements like your 'entry barrier' or your 'dependence on the vendors' or your' dependence on the customer's choice' and so on and so forth. And of course the competition in that market, those things are still relevant in any market. And the point is those things, in my experience, those things change their nature from market to market. Well, I initially, let's say 30 years, I worked in several international markets. Now I really don't work in that many, but what I have seen is that the way business is done or customers make their choices in Singapore, for example, is quite different from what it is in let's say Switzerland.

(05:04):
So if there is a company who would like to understand the competitiveness as I call it personally in that particular market, they need some sort of framework which can help them understand otherwise individually mapping competition in a market or several markets for one product, it could be extremely challenging. One can do that of course, but it'll be like time taking and function of money basically. So I think a framework is needed. Yes, Michael Porter's Five Force Model has seen lots of re-evaluation and some modification, some addition somewhere in the market. However, these three elements, your dependence on the vendor, your entry barrier measurements and your dependence on the customer's choice basically haven't changed. That is what my findings are and what has happened. Possibly if we compare with our findings from 20 years back, our dependence from entry barrier and customer's choice in some cases may have gone towards the dependence on the vendors, vendors', power negotiation power over you.

(06:25):
That again depends on what kind of product you are selling. So we are probably going back to value generation. So if your product needs to be manufactured, assembled, stored, distributed all by yourself, then it's a question of surely where you are going to do it, how you're going to do it, what is your logistics, and therefore you need a number of vendors. On the other hand, if you think that, well, I'm an international marketer and my product will have to be manufactured and all these value chain elements will have to be done all over the world. In that case, the dependence become more and more, if I don't have to tell you how the whole western world has now become dependent on Southeast Asia because of those elements, those cheap labours, those governmental supports regarding tax, regarding export promotion zones and things like that.

(07:26):
And therefore the dependence on those vendors over there are much higher and the vendor's power. Now we can see that we didn't see that 20 years back. Now we can see that it's much higher, particularly we saw that during the covid periods or when actually there were scarcity of many elements because those things were not being transported properly. So if I want to get into a South Asian market, probably this is one story. If I want to get into a Scandinavian market, the story completely, completely differs from that. And to understand this, I still think yes, despite having all sorts of technologies, we need to understand that framework and what am I really dependent on? What or what are the elements? Am I really dependent on in this particular market? And if I plan to target a number of markets, I should not assume that my dependence on several elements will be really uniform all across the board and therefore my strategy will be in uniform.

(08:41):
No, definitely not. So this is what I think should be considered. And secondly, the customer's choices these days, well topic altogether by itself. However, the influence that the customers are under these days are greatly differing, I would say from place to place sometimes, and that also depends on their societal fabric. For example, in India, if you want to buy a washing machine, probably you'll consult a number of people in your family and friends. Whereas in a western country, you wouldn't really bother in Sri Lanka if you buy one washing machine, like to keep it as long as possible. So therefore there is a downstream industry of repairing and servicing. Now as a company, I sell that washing machine, do I compete with just my competitors or with those down the line in case of multi-level marketing, do I compete with those people as well? So there are a lot of questions to answer in that case.

Kiran Kapur (09:58):
So let's slightly unpack your washing machine example because you used a number of jargon words in there. So let's just start slightly unpack it. So what you were saying is if I selling a washing machine into Sri Lanka, I can either just concentrate on selling the washing machine, in which case I'd better know that culturally it's important to talk about the longevity of the machine and perhaps the ability to repair it. And then I can either just stay competing at that level or I can do a multilevel marketing where I can also say I'm going to compete on the repairing as well.

Nandan Sengupta, International Marketing Tutor (10:31):
That is exactly what I'm saying. I'm not saying which one is better over the other. No, that entirely depends on the company strategy, product ability, so on and so forth. But yes, that is what I'm saying. So there is a decision element in that.

Kiran Kapur (10:46):
And your other point, which I thought was really interesting, was we talk about decision-making units whenever we're talking about who is involved in a decision of buying a product. And I think yes, it's very easy with a western mindset to assume that everybody goes to review sites and looks things up online. That is one particular way of doing it. But as you've said in other cultures in India, we would certainly go and talk to family and friends and confer and it would be culturally inappropriate not to do that.

Nandan Sengupta, International Marketing Tutor (11:17):
Quite right. And there are certain factual rhythms behind it because in some countries, again, I'm not naming any in South Asian countries, some of those, the regulatory framework on internet is not very tight. Therefore, when you look at certain reviews and reports, you don't really know how authentic those things are. Those things happen. So when a company judges that market is the only tries to learn and be satisfied that, oh boy, these people talk to their family members. I don't think that's enough. Of course they need to learn that, but they need to learn why as well. If you look at Panasonic, I'm picking that up because I really liked some of their approaches in India when they are talking about those electronic products, family electronic products or consumer electronics as we call them in the advertisement, visual in the marketing communication, they seldom show a couple or an individual, they always show a family, and generally there is an elder who is at the end becoming very happy and therefore everybody else is happy. That actually aligns very well with, again, I'm bringing another jargon, Hofstede Cultural Dynamics Model 'hierarchy'. That's absolutely true in Southeast Asia. The family hierarchy or any sort of power hierarchy is raver thing, and that could ring a bell with these people, whereas over here in England or in Europe, it's there in making a decision, people would probably not really think about going to one's dad or mom to really ask whether I should buy a refrigerator or washing. No.

(13:19):
So these are the things, and in addition to that, these days, lots and lots of this, I should say input stimuli, whatever you call it, through the internet, not only internet, through WhatsApp, through all sorts of social media things, those are actually confusing people in some cases. Some of those are not even correct. It's crowdsourced. Anybody can upload anything anywhere. So in that perspective, generally many of our customers in the larger market in the developing and larger markets where there are immense buying power but not enough power to decide which one is right. For me, being the customer, there is this confusion and therefore this competitiveness of the market can become fierce on price because if nobody understands anything, they will go for price that still remains in those markets. So therefore, I believe that going into the cultural elements, understanding the way people make decisions and the way it gets changed, it keeps changing. If I can talk about something very technical, let's say multitask attribution, let's say in case of pure digital marketing, I have a budget, so I really need to use that budget efficiently, and since I'm doing the digital marketing, I am not going to the customer face-to-face. Therefore I need to know when the customer is shopping, where are they shopping and how genuine is the intention to buy something I should say. These are the three elements which are very important

(15:20):
Because someone coming onto internet does not mean that they're going to buy something.

Kiran Kapur (15:25):
Oh, definitely not. I mean half the fun is just looking around and seeing what's there. Yes, definitely.

Nandan Sengupta, International Marketing Tutor (15:31):
Exactly, exactly. But I have a limited budget, so I cannot really show advertisement or offers to everyone. That would be billions. So I really need to know who is most likely to purchase. I can make mistakes, of course I can. However, if there is a model of, if there are some frameworks which can help me understand that, then it would be helpful. Now if I can work out, let's say you kitan, not ki, your internet protocol, your IP number, this particular number has three or four users from probabilistic study. It can be determined because people can sometimes share devices like iPads and not phones, but some devices in the house. Then if someone is on that IP ads clicking or touching something, I can keep track Now. If I can keep track for six months or eight months, I can actually develop a pattern as to how many times this person really goes into that product before really buying. So again, if we think about our very classical AIDA, I can probably place someone with the help of technology who is more likely to buy something as compared to the other person who is not. That's my take on today's international marketing and the blame of classical and contemporary I should say.

Kiran Kapur (17:09):
It's very interesting because what you're doing is you're talking about using technology and tracking people via cookies and all the other side of things, and obviously there's in some parts of the world, there's legislation that stops us doing that. In other parts of the world there isn't so much. So there's a regulatory framework to think about as well, but it's quite interesting that you've used a technology application and then you've actually come back to another classical framework. So you used AIDA. So just quickly, could you just cover off what AIDA stands for?

Nandan Sengupta, International Marketing Tutor (17:40):
AIDA is Awareness Interest Desire Action, and that action could be buying or not buying, whatever. It's a decisive action, that's all. So yeah, AIDA initial stage, I wouldn't spend much money on that particular person because he or she's just being aware probably not going to buy as they go up the scale, the likelihood of purchases is more. That's it.

Kiran Kapur (18:06):
Thank you. One of the other models you mentioned, which I thought was interesting was you mentioned the Diamond Model. Now that isn't a model that is always used or applied, so could you just briefly explain what it is and then why it's relevant to international?

Nandan Sengupta, International Marketing Tutor (18:19):
Yes, A Diamond Model, Michael Porter initially brought it in to work out how an organisation could really create their competitive advantage by using all those elements which are very simple like the four elements that he used. Very simple things like those are taken from PESTLE basically, or political or sociopolitical elements, competition, your already existing capabilities, so on and so forth. However, the fourth element, which he did use was of great interest to me, which is the factor, any particular factor associated with that particular locality that needs to be identified and exploited if possible. What you can probably think of diamond model as is the strength that you need to really identify the special factor of a particular location, which might help you in creating your competitive advantage. If you don't find a factor, you'll find a factor, no problem. But if you keep that framework in mind, then possibly that might tell you whether or not you need to do something special for that particular location.

(19:41):
That special thing could be taking a definite strategy on vendor app, vendor selection or taking a definite strategy in communication or selecting your association there, business association I'm in. So it could be anything or maybe there are certain resources which could be very, very useful to you. For example, if you are in electric car manufacturing, you would certainly love to have your establishments in countries with lithium. So that kind of factor and there could be a second level of factor over there, rich with lithium and easy to mine it because mining lithium is actually totally against sustainability. So it has got a very high carbon footprint. There could be several factors which need to be balanced and optimised to see whether or not we can create a competitive advantage for us in that particular location. And that is where this diamond model comes in.

Kiran Kapur (20:45):
So in fact, what we've discussed is I think three Porter's models haven't, we've discussed Porter's Five Forces, the Porter's Diamond Model and Porter's Value Chain. I'm getting the impression you're quite, you are a fan.

Nandan Sengupta, International Marketing Tutor (20:57):
No, I'm not a fan, I just cannot get rid of him, but I have to put up with him.

Kiran Kapur (21:05):
Let's come back to one other thing that you talked about and that was you talked about using basic classical frameworks and then having looked use these porters models, we come to segmentation, targeting and positioning and you there you suggested technology starts to help so and technological tools start to help. So can we explore that perhaps picking on a particular market, if that makes it easier to discuss?

Nandan Sengupta, International Marketing Tutor (21:29):
Yeah, absolutely. Any market at all. What I would like to suggest over here is that from my experience, of course customers actually are not that brand loyal these days. Based on that assumption, I'm going to tell you how the technology is going to help. Now, customer A is buying this brand today and buying some other brand tomorrow, especially if those products are ready to disposal or that kind of stuff. Now the point is how do I monitor those customers? Let's say I'm selling red shoes, red shoes for ladies

(22:12):
And I'm an international marketer. I would like to really, really get the feel of the market that is in digital marketing as we call the heat map of the market. Not just on one day but on a regular basis. So if I use one of the softwares which can actually monitor millions and billions of people, let's say I can see that in Mexico right now, 10,000 people are searching for this because the Google search I can monitor or not only Google search, any search for that matter in China, those people are monitoring in India, not much activity is going on and why is that? Because probably India is asleep. That's not the time for them. I'm talking globally. So first thing then having looked at it, first thing I decide, okay, at this time I will focus on this. At that time I'll focus on that, so on and so forth. And having monitor all this, I don't really have to sit in front of the monitor for the whole day. There are softwares who can work on this and can give me the insight at the end of the day or the week or the month.

(23:24):
So having monitored for six months, I really get to see the pattern and how it changes and if I want to pick up one particular IP from there, I can do that.

(23:39):
Although we don't do that. What we do generally is we try to see, let's say how many ips are searching for red shoes regularly and buying them. Let's say after a week's search from those millions and billions of data, I can probably work out those data insights which are going to give me, this is at a very, very basic stage. Give me the requirement for the product, the demand for the product. As I go deeper into it, I can actually focus on a funnel system. I can focus onto the customers who I think will buy my product within the time period years that I want them to buy. Depending on the product, it could be one week, it could be one year. That entirely depends on the kind of product that I'm dealing with. So that is how we can start applying the technology at the second level. What sort of cross identification are we doing through our technology application A little while back? You mentioned cookies, right? So cookies are the very basic monitoring tools which are always there. But people, those who know that how cookies work, they always can clear their cash, they always can clear the, I do that all the time. So how else can we do that? As a marketer, I would like to really have my grip on the data which are coming out of each household, which we used to do 30 or 40 years back through household research, market research, I mean,

(25:25):
And those market research were not always very curate, but this time the market research is through these technologies should be very accurate because first of all they're non-invasive. Second of all, people don't know about it. Technically they do because they have ticked this I everything on their apps, on everything that they do, but nobody really reads through these 10 or five pages of agreements.

(25:54):
So in a typical household, if you look at the iot instruments devices, you will see it can start right from the ring bell at your door. That actually captures data, creates data, that data and people might ask, what are you going to do with that data? Well, that data tells me when people go out and when they come back. So eventually that tells me their leisure time. So if I have a product for their leisure time, if I'm streaming something, if I'm in entertainment business, that might be relevant. I'm not saying all data will be relevant.

(26:32):
That's the third part. Data validation and data churning. So then let's say this Alexa or high Google or high C, it's not that they are being active when you are asking them to be, it's that they're listening 24 by seven. Even the voice control televisions smart TV sets, they're listening 24 7. They're not telling you that they're listening, but those things are in the agreement that you have put your sign on and they let you know that they exist when you ask them to do something. Now all these data, whatever language that is being spoken to are being collected by hard parties and being chd and insights are getting generated. And of course there are lots and lots of companies who are doing only this, nothing else. Google is one of course you know that,

(27:27):
But Google is not the only one. There are many other one I can probably mention here is Adobe with their experience cloud platform, which is extensive and very expensive. It's only for international MNCs very expensive. And the advantage with Adobe is that that's how actually they created their competitive advantage because they send out cookies and all sorts of spider programmes as we call them, to all households. They just collect data. That's all. Even if you don't use one of their things, some of the apps have some sort of agreement with them and they start creating individual customer without invading their privacy of course, and therefore they have immense customer insight which they sell.

Kiran Kapur (28:22):
So we've talked a lot about classical frameworks, which is great. We've talked about how you can use technology, some of which from when you put your marketing head on sounds amazing. And then you put your private head on and you go, oh, am I really comfortable with that? But this is how marketing goes and you've talked about Adobe experience cloud and other things. If I'm sitting as a marketer at the moment, and I suspect a lot are wherever you are in the world, the chances are you may be dealing with complications in your own marketplace. You may just be feeling the grass is greener. You may have a product that you know want to sell internationally. Where do you start?

Nandan Sengupta, International Marketing Tutor (29:05):
I would probably start with analysing the business that I have at the moment. Again, the classical framework. What is my product? Who are my customers? Where are they? What is my strength? I'm not really going into that sort thing yet. What are my strengths or what are my, why should people buy my product? Now, the initial assessment, if I went to go internationally, the initial assessment will probably give you some idea as to these are the regions which just might be congenial to my product.

(29:47):
And at that very point I would like to really analyse those regions or some of those regions which look more promising with a full peal analysis or PEs comm analysis, something like that where it can give me a fairly good idea as to how the economic situation is political situation is and technological situation is because I haven't really done my factor analysis to really understand what is the factor, if there is any at all in that region, which will help me create some competitive advantage. Even if there is no factor, I may want to go into that market because that is too lucrative, but what should I do to make myself workable, to make my product attractive to that market? For that, I think a basic one of those frameworks, any framework,

Kiran Kapur (30:42):
Nandan Sengupta, that was absolutely fascinating. It was a very helpful overview about where to start with international marketing and also the sort of models and frameworks that you need to help you. Otherwise, it can seem a very big world out there and very difficult to know where to start. So thank you very much for your time and your insight.

Nandan Sengupta, International Marketing Tutor (31:01):
Thank you very much Kieran, for having me and it was a pleasure discussing this thing with you. Thank you.