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TOPIC 12 : GLOBAL MARKETING AND R&D, NURUL SHAHIRAH BINTI NOORAZRI…
TOPIC 12 : GLOBAL MARKETING AND R&D
How Product Attributes Influence Marketing Strategy
A product is like a bundle of attributes.
Products sell well when their attributes match consumer needs - if consumer needs were the some everywhere, a firm could sell the same product worldwide.
1. Culture
- Tradition, social structure, language, religion, education
2. Level of economic development
Consumers in highly developed countries tend to demand a lot of extra performance attributes
Consumers in less developed nations tend to prefer more basic products
3. Product and technical standards
- National differences can force firms to customize the marketing mix
Differences of Distribution Systems
1. Retail concentration : Concentrated vs. Fragmented
In a concentrated retail system, a few retailers supply most of the market - common in developed countries.
In a fragmented retail systems there are many retailers, no one of which has a major share of the market - common in developing countries
2. Channel Length: The number of intermediaries between the producer and the consumer
Short Channel
is when the producer sells directly to the consumer and is common with concentrated systems.
Long Channel
is when the producer sells through an import agent, a wholesaler, and a retailer, and is common with fragmented retail systems.
3. Channel exclusivity
: How difficult it is for outsiders to access
Japan's system is an example of a very exclusive system.
4. Channel quality
: the expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international business
The quality of retailers is
Good in most developed countries, but variable at best in emerging markets and less developed countries.
Firms may have to devote considerable resources to upgrading
channel quality.
Standardized Advertising
Standardized advertising makes sense when
It has significant economic advantages - lowers the cost of value creation by spreading the fixed costs of developing advertisement.
Creative talent is scarce - one large effort to develop a campaign will be more successful than numerous smaller efforts.
Brand names are global - maintain its global image and influence its brand perception.
Standardized advertising does not make sense when
Cultural differences among nations are significant
Advertising regulations limit standardized advertising
Some firms standardize parts of a campaign to capture the benefits of global.
Strategic Pricing
Predatory pricing
Use profit gained in one market to support aggressive pricing designed to drive competitors out in another market.
After competitors have left, the firm will raise prices.
Multi - point Pricing
A firm's pricing strategy in one market may have an impact on a rival's pricing strategy in another market.
Managers should centrally monitor pricing decisions
Experience Curve Pricing
Price low worldwide in an attempt to build global sales volume as rapidly as possible, even if this means taking large losses initially.
Firms that are further along the experience curve have a cost advantage relative to firms further up the curve.
NURUL SHAHIRAH BINTI NOORAZRI [HR0107995]