CHAPTER 9
INTERNATIONAL MARKETING

Marketing

Process of planning & executing the conception,
pricing, promotion, and distribution of ideas, goods
and services.

  • Finance
  • Human Resource Management
  • Operations Management
  • Accounting

Market Strategy Must Support Business Strategy

  • Differentiation
  • Cost Leadership
  • Focus

Differentiation

  • This strategy requires products development as well as pricing, promotional and distribution tactics that differs from other competitors in the customer's eyes.

Cost Leadership

  • Adopt an international business strategy that stresses its overall cost leadership
  • Can be pursued and achieved through systematic reductions in production and manufacturing, sales costs and use less expensive materials etc

Focus

  • Marketing managers will concentrate their efforts on particular segments of the consumer markets.

Business Strategies

Marketing Mix

Key Decision-Making Factors

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  1. How to develop firm's product(s)?
  1. How to price those products
  1. How to sell those products
  1. How to distribute those products to the firm's customers

Standardization versus customization

Legal Forces

Economic Factors

Changing Exchange Rates

Target Customers

Cultural Influences

COmpetition

  • Ethnocentric Approach


    • Easier to adopt. Firm markets goods in international markets using the same marketing mix used domestically.

  • Polycentric Approach


    • More expensive. International Marketers customize firm's marketing mix in each market the firms enters to meet the idiosyncratic needs of customers in that market.

  • Geocentric Approach


    • A standardization of marketing mix, allow firm provide same product/service in different markets and use the same marketing approach

Advantages

  • Reduce marketing costs
  • Facilitates centralized control of marketing
  • Promotes efficiency in R&D
  • Results in economies of scale in production
  • Reflects the trend toward a single global marketplace

Disadvantages

  • Ignores different conditions of product use
  • Ignores local legal differences
  • Ignores differences in buyer behavior patterns
  • Inhibits local marketing initiatives
  • Ignores other differences in individual markets

Customized International Marketing

Advantages

  • Reflects different conditions of use
  • Acknowledges local legal differences/differences in buyer behavior
  • Accounts for other differences in individual markets

Disadvantages

  • Increase costs/inefficiencies
  • Inhibits centralized control of marketing
  • Reduces economies of scale in production
  • Ignores the trend toward a single global marketplace

Product

Comprises of;

  • Tangible Factors
  • Intangible Factors

Factors Affecting Standardization of Products

  • Legal Forces
  • Economic Factors
  • Cultural Influences
  • Brand Names

Factors Affecting Pricing Policies

  • Business Strategy
  • Competitive Environment
  • Costs of Doing Business
  • Exchange Rate Flunctuations

Standard Price Policy

  • where firm charges the same
    price for its products and services

Two-tiered Pricing

Market Pricing

Where firms sets one price for all its domestic sales & a second price for all its international sales.

  • Most complex of the three pricing policies but most commonly adopted.
  • A firm utilize market price customizes its prices on a market-by-market basis to maximize profits in each markets.

Firms must face;

  • Different demand
  • Different cost conditions

Risks to Market Pricing Policy

  • Charges of dumping
  • Damage to brand name
  • Development of a gray market
  • Consumer resentment

Promotion Mix

Advertising

Personal Selling

Sales Promotion

Public Relations

Factors Affect Advertising Strategy

  • Messages it wants to convey
  • Media available for conveying messages
  • Extend to which the firm wants to globalize its advertising effort

Advantages for
International Firms

  • Local sales representative understand local culture, norms and customs
  • Promotes close, personal contact w customers
  • Easier for firm to adopt valuable market information
  • A specialized marketing efforts, to offer incentive to customers
  • E.g Coupons, in-store promotions, sampling, direct mail campaigns etc

Consists of efforts aimed at enhancing firm's reputation and image with general public

Basic Parts of
Distribution Channel

  • Manufacturers
  • Wholesaler
  • Retailer
  • Customer