Ch – 14 International Marketing
International Market vs. Domestics Marketing - Situation Analysis, Segmentation Strategies, Target Markets, Marketing Mix, and Marketing Strategies.
International vs. Domestic - Situation Analysis
More than one set of environmental variables.
Interactions between them - Trade and foreign policies, Tariffs and other barriers, and Exchange rates.
Variables which are Especially Important- Infrastructure, Market structure, and Socio/cultural variables.
International vs. Domestic - Strategies
Domestic Market Extension
Multi-domestic
Global Marketing
Domestic Market Extension
Sales of domestic products in int. markets.
Domestic orientation
International Market secondary
Firm seeks markets similar to domestic.
Little adaptation of product or marketing mix.
Usually produced domestically
Multi-Domestic Orientation
Separate operations in each country - production, marketing etc.
Different strategies and marketing mixes
Very little interaction
Markets could be very different.
Global-Marketing Orientation
Views the world as one market.
Develop product and marketing strategies for world markets.
Standardize as far as possible, adapt where necessary.
Economies of scale, transfer of knowledge and technology, global image, and better competitive position.
Screening Process
Preliminary Screening.
Estimating market potentials by Product Type.
Estimating sales potentials for company’s products.
Identifying Segments in Target markets.
International vs. Domestic - Marketing Mix.
Standardization/Differentiation mainly in terms of Product and Promotions.
Product and Promotion Extension (Standardization)
Product Extension/Promotion Adaptation
Product Adaptation/Promotion Extension
Dual Adaptation (Differentiated)
Product Invention
Five International Product
and Promotion Strategies
Product Policies.
Standardize where possible adapt where necessary.
Regional, Country or local Characteristics
Product Characteristics.
Company Considerations.
Three components which could be changed.
Core component; packaging component; and support services component.
Core component - Physical product, design features, functional features.
Culture and use; minor changes easier; major changes costly; functional features easy to adapt.
Three components which could be changed.
Packaging component - Price, quality, styling, color, trademark, brand name, etc (psychological features).
Economic or environmental requirements;Govt. requirements; Distribution requirements; consumer/cultural requirements.
Three components which could be changed.
Support services component - deliveries, warranty, repair and maintenance, spare parts etc.
Market characteristics, size, competition, level of development etc.
Country of origin effects.
Stereotypes about products and countries.
English Tea, French Perfume, Chinese Silk, Italian leather, Japanese cars and electronics.
Usually product specific.
Stereotypes based on level of industrialization.
Can be overcome with good marketing.
Pricing.
Objectives depend upon company orientation
Domestic market extension - bonus volume; not part of mkt. Mix, no control over final price; could recover only variable costs.
Multinational or global - Specific mkt. Mix; control over final price; recover all costs .
Variables that influence international pricing
Taxes and tariffs - Specific duty, Ad Valorem, Combination.
Inflation - Time, Payment terms, possible price control.
Exchange rate Fluctuation - Prices of products and profits.
Middlemen and transportation costs - Longer, diverse, underdeveloped, smaller order quantities, could all increase costs.
Parallel Imports.
Parallel Imports/ Gray Markets.
Value of currencies.
Pricing policies.
Costs of transportation less than price differential.
Price controls or quotas.
Exclusive distribution agreements.
Global Advertising and Promotion Effort.
Global or standardized advertising strategy.
Pattern Advertising (similar basic message with some local variation)
Customized.
Marketing strategy; Cultural differences; Behavior in terms of the product; Media availability.
Global advertising strategy.
Developed on a global basis not exported.
Most large firms do not use, only 8% of U.S. multi-national firms.
Pattern advertising.
Plan globally act locally.
Broad outlines or basic positioning given but details can be adapted.
Assuming that there are some differences in culture and consumer behavior even if primary function is the same.
Creative challenges.
Legal considerations - comparative advertising, time allocations, length and number of commercials, special taxes, type of product, type of copy and illustration, etc.
Language limitations - translating ad slogans, literacy levels, use of different languages.
Creative challenges.
Cultural diversity - Symbols, colors, tastes, values and beliefs etc. - subcultures.
Production and cost limitations - Poor quality printing, lack of high grade paper, film editing and processing facilities, high comparative cost for quality.
Media - Availability, Audience data, international media.
Advertising agencies.
Local agency.
Company owned agency.
Multinational Agency with local branches.