chapter eighteen Marketing Internationally McGraw-Hill/Irwin International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc All rights reserved 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 18-3 Learning Objectives Explain why consumer products generally require greater modification for international sales than 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 marketing Discuss the distribution strategies of international marketers 18-4 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 18-5 Standardize, Adapt, or Formulate Anew? • Management would prefer global 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 • Reduction of preparation time • Often not possible 18-6 Product Strategies • Product is central to marketing mix • Total product includes – – – – – – – – Physical product Brand name Accessories After-sales service Warranty Instructions for use Company image Package 18-7 Total Product 18-8 Types of Products • Industrial Products – Many can be sold unchanged worldwide (computer chips) – If changes are required, they may be cosmetic (printing instructions in another language) – In developing countries problems with • Overload of equipment • Maintenance – Local legal requirements 18-9 Types of Products • Consumer Products – Require greater modification to meet local market requirements than industrial products – Some can be sold unchanged to certain market segments • Large automobiles, sporting equipment, and perfumes – Greater dissimilarity as you go down the economic strata 18-10 Personal Selling • Internet – Would seem to eliminate the need for personal selling, but may not be so – Successful personal selling depends on establishing trust • Evolving approaches to trust building in a virtual environment 18-31 Personal Selling • International Standardization – An overseas sales force is similar to the home country in • Organization • Sales presentation • Training methods – Recruitment of salespeople in foreign countries can be difficult 18-32 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 18-33 Public Relations • Various methods of communicating with the firm’s publics to secure a favorable impression – Markets firm – Improves image and overcomes negative perceptions – May work through government agencies 18-34 Pricing • 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 18-35 Interaction between Marketing and Other Functional Areas • The finance people want prices that are profitable and conducive to steady cash flow • Production supervisors want prices that create large sales volumes, which permit long production runs • Legal department worries about possible antitrust violations when different prices are set according to type of customer 18-36 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 importing • The marketer must address all these concerns and consider – Legal forces – Environmental forces 18-37 Standardizing Prices • Difficult if desirable – Foreign National Pricing • Local pricing in another country – International Pricing • Setting prices for unrelated and related firms – Transfer pricing • Intracorporate price, price of a good or service sold by one affiliate to another, the home office to an affiliate, or vice versa 18-38 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 18-39 Standardizing Distribution • Disintermediation – Unraveling of traditional distribution structures • Most often the result of being able to combine Internet with fast delivery services 18-40 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 18-41 Foreign Environmental Forces and the Marketing Mix Matrix 18-42 Foreign Environmental Forces and the Marketing Mix Matrix 18-43 Foreign Environmental Forces and the Marketing Mix Matrix 18-44 Foreign Environmental Forces and the Marketing Mix Matrix 18-45 ... 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 18- 3 Learning Objectives... advertising strategies Discuss some of the effects the Internet may have on international marketing Discuss the distribution strategies of international marketers 18- 4 International Marketing • Develop... on the country, the product types, and the target market – Language often an issue • back translation • plenty of illustrations with short copy 18- 28 Advertising • What should be the approach of