International bussiness the challenge of global competition 11e chapter 18

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