International bussiness the challenge of global competition 11e chapter 18

Learning Objectives Explain why there are differences between domestic and international marketing  Explain why international marketing managers may wish to standardize the marketing

Marketing Internationally

chapter eighteen

Learning Objectives

 Explain why there are differences between domestic and

international marketing

 Explain why international marketing managers may wish to

standardize the marketing mix regionally or worldwide

 Explain why standardizing the marketing mix globally is

often impossible

 Discuss the importance of distinguishing among the total

product, the physical product, and the brand name

Learning Objectives

 Explain why consumer products generally require greater

modification for international sales than do industrial products or

services

 Discuss the product strategies that can be formed from three

product alternatives and three kinds of promotional messages

 Explain “glocal” advertising strategies

 Discuss some of the effects the Internet may have on international

International Marketing

• Develop marketing strategies by assessing the

firm’s potential foreign markets and analyzing

the many alternative marketing mixes

– Must plan and control a variety of marketing strategies

• Rather than a single unified and standardized

one

• Coordinate and integrate those strategies

into a single marketing program

Standardize, Adapt, or Formulate

Anew?

standardization of the marketing mix

• Significant cost savings

• Longer production runs

• Standardized advertising, promotional

materials, and sales training

• Standardized corporate image

• Standardized pricing strategies

• Easier control and coordination

Product Strategies

Total Product

Types of Products

• Industrial Products

(computer chips)

(printing instructions in another language)

• Overload of equipment

• Maintenance

Types of Products

requirements than do industrial products

Types of Products

• Services

– Marketing of services similar to that of industrial products

• Services easier to market globally compared

to consumer products

• Laws and customs may force changes

Foreign Environmental Forces

• Sociocultural Forces

– Dissimilar cultural patterns generally require

changes in food and other consumer goods

Foreign Environmental Forces

– Laws prohibiting classes of imports

• Food and pharmaceuticals influenced by

laws concerning purity and labeling

– Legal forces may prevent use of brand name

worldwide

• In some countries brand may be registered to

someone else

Foreign Environmental Forces

– Great disparity in income throughout world

– Obstacle to product standardization

– Many industrialized country products too expensive for

developing country consumers

• Must either simplify the product or produce a different, less costly one

Foreign Environmental Forces

Promotional Strategies

• Promotion

– Any form of communication between a firm and its publics

• To bring about a favorable buying action and

achieve long-lasting confidence in the firm and the product or service it provides

Promotional Strategies

• Distinct promotional strategies based on

combination of three alternatives

– Marketing the same physical product everywhere

– Adapting the physical product for foreign markets

– Designing a different physical product with

• (a) the same message

• (b) adapted message or

• (c) different message

Six Common Promotional Strategies

• Same product-same message

– Avon, Maidenform

• Same product-different message

– Honda’s campaign in America is different than in Brazil

• Product adaptation-same message

– In Japan, Lever Brothers puts Lux soap in fancy boxes to encourage gift

sales

Six Common Promotional Strategies cont’d.

• Product adaptation-message adaptation

– In Latin America, Tang is sweetened and promoted as mealtime drink

• Different product-same message

– Product is produced in low cost plastic squeeze bottle for developing

countries, but advertised the same

• Different product for the same use-different

message

– Welding torches rather than automatic welding machines are sold in

developing countries

The Promotional Mix

• Advertising

• Personal selling

• Sales promotion

• Public relations

• Paid, nonpersonal presentation of ideas,

goods, or services by identified sponsor

– Among promotional mix elements, advertising

• Has the greatest similarities worldwide

• Is formulated and executed through global

ad agencies that have wholly owned subsidiaries, joint ventures, and working agreements with local agencies

Global and Regional Brands

• Reasons for increase in global and regional

brands

– Cost

– Better chance of obtaining one regional source

for high-quality work

– Belief that single image throughout region is

important

– Establishment of regionalized organizations with

many functions centralized

– Growth of global and regional satellite and cable

Top Twenty Brands 2006

Impact of Culture on Advertising

• Branding

• Managers may convert or use a combination

• Serious competitors

• Alliances with international retailers

• Trend common in Europe

• Media

– Satellite TV expands availability of media

– International print media available

• Reader’s Digest has 48 foreign editions

– Cinema and billboards used heavily in Europe

– In developing countries, vehicles equipped with

loudspeakers

• Internet Advertising

• An affluent, reachable audience

• Web contacts feature interactivity, shrinks

distance

• Involve customers in determining which

messages and information they receive

• For some groups, Internet may be among the

best media choices

– Basic cultural decision for marketer: position the product as

• What should be the approach of the

international advertising manager?

– Think globally, but act locally

– Neither global nor local-”glocal”

– Pan regional approach

• Latin America

• Middle East

• Africa

• Atlantic

Personal Selling

• Internet

selling, but may not be so

establishing trust

• Evolving approaches to trust building in a

virtual environment

Sales Promotion

• Any various selling aids, including

displays, premiums, contest, and gifts

• Sociocultural and economic constraints

make some sales promotions difficult to

use

– If premium is to fulfill the sales aid objective, it

must be meaningful to the purchaser

– Sales promotion is generally less sophisticated

overseas than in U.S

Public Relations

• Various methods of communicating with the

firm’s publics to secure a favorable impression

• Important and complex consideration in

formulating marketing strategy

• One of the marketing mix elements that can be

varied to achieve firm’s marketing objectives

• Made more complex by

– Interaction with the other functional areas

– Environmental forces

Interaction between Marketing and Other

Functional Areas

and conducive to steady cash flow

large sales volumes, which permit long

production runs

violations when different prices are set according

Interaction between Marketing and Other

Functional Areas

• The tax people are concerned with effects of

prices on tax loads

• The domestic sales manager wants export

prices to be high enough to avoid parallel

Standardizing Prices

• Difficult if desirable

• Local pricing in another country

• Setting prices for unrelated and related firms

• Intracorporate price, price of a good or

service sold by one affiliate to another, the home office to an affiliate, or vice versa

Distribution Strategies

• Distribution Decisions

– Often interdependent with other marketing mix variables

• Standardizing Distribution

– Two fundamental constraints

• The variation in availability of channel

members

• The environmental forces present in these

different markets

Standardizing Distribution

• Disintermediation

– Unraveling of traditional distribution structures

• Most often the result of being able to

combine Internet with fast delivery services

Channel Selection

• Direct or Indirect Marketing

– The first decision: whether to use middlemen

– Export sales may be consummated by local

agents if

• Management believes this is politically expedient

• Country’s laws demand it

• Factors Influencing Channel Selection

• Market

• Product

• Company

• Middlemen

Foreign Environmental Forces and

the Marketing Mix Matrix

Foreign Environmental Forces and

the Marketing Mix Matrix

Foreign Environmental Forces and

the Marketing Mix Matrix

Foreign Environmental Forces and

the Marketing Mix Matrix