International bussiness 6th griffin pustay chapter 16

Chapter Objectives • Characterize the nature of marketing management in international business • Discuss the basic kinds of product policies and decisions made in international business

Chapter Objectives

• Characterize the nature of marketing

management in international business

• Discuss the basic kinds of product

policies and decisions made in international business

• Identify pricing issues and evaluate

pricing decisions in international business

Chapter Objectives (continued)

• Identify promotion issues and evaluate promotion decisions in international

business

• Discuss the basic kinds of distribution issues and decisions in international business

Marketing is “the process of planning

and executing the conception, pricing, promotion, and distribution of ideas,

goods, and services to create exchanges that satisfy individual and

International Marketing

International Marketing is the

extension of these marketing activities

across national boundaries

Figure 16.1 International Marketing as an

Integrated Functional Area

Operations Management

Finance

Human Resource Management Accounting

Marketing

Market Strategy Must Support

Business Strategy

Differentiation

Focus Cost Leadership

Marketing Mix Issues

• How to develop the firm’s product(s)

• How to price those products

• How to sell those products

• How to distribute those products to the firm’s customers

Figure 16.2 Elements of the Marketing Mix

for International Firms

Key Decision-Making Factors

• Standardization versus customization

Standardization versus Customization

Ethnocentric Approach

Polycentric Approach

Geocentric Approach

Table 16.1 Standardized International Marketing

• Reflects the trend toward

a single global marketplace

buyer behavior patterns

• Inhibits local marketing

initiatives

• Ignores other differences in

individual markets

Table 16.1 Customized International Marketing

• Accounts for other

differences in individual markets

Disadvantages

• Increases costs/

inefficiencies

• Inhibits centralized control of marketing

• Reduces economies

of scale in production

• Ignores the trend toward a single global marketplace

Product comprises both the set of

tangible factors that the consumer can see or touch (the physical product and its packaging) and numerous intangible factors such as image, installation,

warranties, and credit terms

Factors Affecting the Standardization of Products

Legal forces influencesCultural

Economic

Factors Affecting Pricing Policies

Business strategy Competitive environment Costs of doing business Exchange rate fluctuations

Pricing Policies

Standard Price

Policy

MarketPricingTwo-Tiered

Pricing

Figure 16.3a Determining the

Profit-Maximizing Price

Figure 16.3b Determining the

Profit-Maximizing Price

Conditions for Market Pricing

• Firm must face different demand and/or cost conditions in the countries in which it sells its products

• Firm must be able to prevent arbitrage

Risks to Market Pricing Policy

Charges of dumping

Development of a gray market

Consumer resentmentDamage to brand name

Promotion Mix

Factors Affecting Advertising Strategy

• The message it wants to convey

• The media available for conveying the

message

• The extent to which the firm wants to

globalize its advertising effort

Message: the facts or impressions the

advertiser wants to convey to potential customers

Advertising (continued)

Medium: the communication channel

used by the advertiser to convey a

message

Personal Selling

Personal Selling: making sales on the

basis of personal contacts

Advantages of Personal Selling for

International Firms

• Local sales representatives understand local culture, norms, and customs

• Personal selling promotes close,

personal contact with customers

• Personal selling makes it easier for firm

to adopt valuable market information

Sales Promotion

Sales promotion: comprises specialized

marketing efforts designed to offer an incentive for behavior such as coupons, in-store promotions, sampling, direct mail campaigns, cooperative advertising, and

trade fair attendance

Public Relations

Public Relations consists of efforts

aimed at enhancing a firm’s reputation and image with the general public, as opposed

to touting the specific advantages of an

individual product or service

Distribution Issues

Physicaltransportation

mode

Merchandising

mode

Table 16.2 Advantages/Disadvantages of

Transportation Modes

Products

Train Safe, reliable,

inexpensive Limited to rail routes, slow Automobiles, grains

Airplane Safe, reliable, fast Expensive,

limited access Jewelry, medicine

Basic Parts of a Distribution Channel

Manufacturer

Wholesaler

Retailer

Customer

Figure 16.4 Distribution

Channel Options

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