Marketing in international markets and globalization

Marketing Environment

Simon Isrif, 438344, DIM1VC

12-10-2016

Week 1.6      Marketing in international markets and globalization

(Marketing Strategy International, 2011)

Has your product an international brand?

Sennheiser is very internationally involved (global marketing), the company’s headphones are available worldwide, and their network of sales subsidiaries and partners are global (Sennheiser, n.d.). In 2011 Sennheiser had a value-based share of 22% of the total European headphones market, making the company the clear market leader (Sennheiser, 2011). Foreign direct investment is Sennheiser’s main market entry strategy, they incorporate business from all over the world. For example, Sennheiser has acquired the business of Vienna-based distributor, Grothusen Audio Video Vertriebs Ges.m.b.H on the 8^th of February, 2016. The company became a sales subsidiary and changed its name to Sennheiser Austria GmbH (TPI Magazine, 2016). There are no indicators that there are differences in product positioning between countries.

Do you see evidence of impact of the recent international turmoil (e.g. Ukraine Crisis/ trade with Russia, ISIS in the Middle East, War in Israel/Gaza, Ebola virus in Africa, Argentina bankruptcy, “Brexit”) on your company and/or your product?

According to Sennheiser’s Annual Report of 2015, the growth of the EMEA region (Europe, Middle East, and Africa) was moderate. The report stated that development in the region was undermined by the Ukraine conflict and the crisis in Syria. The events caused an acceleration in the depreciation of the ruble against the euro and also caused less manoeuvrability on the Russian sales market (Sennheiser, 2015).

Which international legal forces (government policies, tax regulation) have an impact on the marketing position of your product?

Additional duties & taxes

For some countries tax regulations and additional duties have an impact on the importation of Sennheiser products. I found a statistic about the importation of Sennheiser HD 448 headphones to multiple countries. A difference can be found in sales taxes, MFN duty rates and additional duties and taxes for almost every country. A country where an impact on Sennheiser’s marketing position could be caused by these taxes and regulations is for example Bangladesh. If people from Bangladesh want to import the HD 448 they have to pay an MFN duty rate of 25%, a sales tax of 15% and also additional duties: Regulatory Duty (RD) (4% (CIFD + Supplementary Duty (SD))) and AIT(Advance Income Tax) (5% CIFD) (Duty Calculator, n.d.). All these additional taxes and duties can raise the price of the Sennheiser headphones significantly, people may go for alternative products with less duties and taxes.

Governmental policies

A good example of what could affect Sennheiser’s marketing positions in a country is the one given in the Marketing Concepts and Strategies book (Chapter 4, Political, regulatory and legal forces on page 118). The example was about that a few years ago the Japanese government had to inspect every imported electronic item before they could enter the country (Dibb, Simkin, Pride, & Ferrel, 2016). Sennheiser’s headphones (which are an electronic item) could have a direct disadvantaged due to this. Importation would be delayed and domestic headphone companies in the country could have an advantage.

References

Dibb, S., Simkin, L., Pride, W., & Ferrel, O. C. (2016). 4. In Marketing Concepts and Strategies (7th ed.). Hampshire: United Kingdom.

Duty Calculator. (n.d.). Import duty & taxes for Sennheiser hd 448 headphones. Retrieved from http://www.dutycalculator.com/dc/997163/electronics-games/audio-mp3/headphones/import-duty-rate-for-importing-sennheiser-hd-448-headphones-from-hong-kong-to-canada-is-0/

Marketing Strategy International. (2011). Retrieved from http://marketingstrategyinternational.com/2011/09/

Sennheiser. (2011, February 9). Sennheiser is the clear market leader in the European headphones market. Retrieved from https://en-us.sennheiser.com/news-sennheiser-is-the-clear-market-leader-in-the-european-headphones-market

Sennheiser. (2015). Sennheiser Annual Report. Retrieved from https://en-us.sennheiser.com/annual-report

Sennheiser. (n.d.). Overview of our Sales Partners. Retrieved from https://en-us.sennheiser.com/about-sennheiser-at-a-glance-sennheiser-worldwide

TPI Magazine. (2016, February 16). Sennheiser Increases Focus On Austria / Eastern Europe With Partner Acquisition | TPi. Retrieved from http://www.tpimagazine.com/sennheiser-increases-focus-on-austria-eastern-europe-with-partner-acquisition/