Bild 1

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The 4 Ps The Marketing Mix
Marketing Mix
Product Quality Design Features Brand
name Packaging Warranties
Price List price Disscunts Credit terms
Promotion Advertising Promotions Personal
selling Publicity
Place Channels Coverage Location Transport
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CUSTOMER BENEFITS
COMPANY BOUNDARIES
CONFIGURATION
VALUE NETWORK
CUSTOMER INTERFACE
STRATEGIC RESOURCES
CORE STRATEGY
Suppliers Partners Coalitions
Fulfillment Support Information
Insight Relationship Dynamics Pricing Structure
Business Mission Product/Market Scope Basis for
Differentiation
Core Competencies Strategic Assets Core Processes
EFFICIENT / UNIQUE / FIT / PROFIT BOOSTERS

• The major components of the business concept are
  tied together by three important bridge
  elements customer benefits, configuration, and
  company boundaries.

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Core StrategyThree Elements

• The business mission describes the overall
  objective of the strategy, sets a course of
  direction, and defines a set of performance
  criteria that will be used to measure progress.

• Product/market scope defines where the firm
  competes.

• Basis for differentiation captures the essence of
  how a firm competes differently than its rivals.

4
Strategic Resources

• Core competencies are the set of skills, systems,
  and technologies that creates uniquely high value
  for customers.
• Strategic assets are the more tangible
  requirements for advantage. Strategic assets are
  brands, customer data, distribution coverage,
  patents.
• Core processes are the methodologies and routines
  that companies use to transform competencies,
  assets, and other inputs into value for customers.

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External Drivers of Globalization

• Several forces are driving companies around the
  world to globalize by expanding their
  participation in foreign markets.

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• A first step in developing effective
  international marketing strategy centers on
  understanding the alternative ways that a firm
  can participate in international markets.
• The mode of entry selected should consider the
  level of a firms experience overseas and the
  stage in the evolution of its international
  involvement.

Spectrum of Involvement in International Marketing
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Contractual Entry Modes

• Licensing.
• Franchising.
• Management Contracts.

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Strategic Alliances Stumbling Blocks

• Partners are organized quite differently for
  making marketing and product design decisions.
• Partners that combine the best set of skills in
  one country may be poorly equipped to support
  each other in other countries.
• The quick pace of technological change often
  guarantees that the most attractive partner today
  may not be the most attractive partner tomorrow.

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• The Value Chain Upstream and Downstream
  Activities

A firm that competes in the international market
must decide how to spread the activities among
countries. Central to this decision is the need
to distinguish upstream from downstream
activities.
Developed by Cool Pictures and MultiMedia
Presentations
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A Brief introduction to Marketing in Global
Markets

• Kristianstad University
• February 16
• By Christer Ekelund

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The purest global strategy concentrates as many
activities as possible in one country, serves the
world market from this home base, and closely
coordinates those activities that must be
performed near the buyer.
Types of International Strategy
Developed by Cool Pictures and MultiMedia
Presentations
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Framework For Global Strategy
Build on the Foundation of a Unique Competitive
Position.
Emphasize a Consistent Positioning Strategy
across International Markets.
Establish a Clear Home Base for Each Distinct
Business.
Global Strategy
Leverage Product-Line Home Bases at Different
Locations.
Disperse Activities to Extend Home Base
Advantages.
Source Adapted from Michael E. Porter,
Competing Across Locations Enhancing
Competitive Advantage through a Global Strategy,
in Michael E. Porter (ed.), On Competition
(Boston Harvard Business School Press, 1998),
pp. 309-350.
Coordinate and Integrate Dispersed Activities.
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Extending the Firms Competitive Position

• Capturing competitive advantages in purchasing.
• Securing or improving market access.
• Selectively tapping competitive advantages at
  other locations.

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Global Competitors Achieve Unified Action By

• Establishing a clear global strategy.
• Developing information and accounting systems
  that are consistent on a worldwide basis.
• Encouraging personal relationships and the
  transfer of learning among subsidiary managers.

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Global Marketing and RDIs the globalisation of
markets reality?

• Different Market segment
• Different Product attributes depending on
• Cultural differences
• Economic differences
• Technical standards
• Different distribution depending on
• Retail concentration
• Channel length
• Channel exclusivity
• 4 Communication

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Market segmentation

• Refers to identifying distinct groups of
  consumers whose purchasing behavior differs from
  others in important ways
• Segments can based on
• Geography
• Demography
• Socio-cultural factors
• Psychological factors

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Market segmentation

• Two main issues relating to segmentation
• Extent of differences between countries in the
  structure of market segments
• Existence of segments that transcend national
  borders

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Product attributes

• Cultural differences
• Economic development
• Product and technical standards

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Cultural differences

• Differ along dimensions such as social structure,
  language, religion and education
• Impact of tradition
• Some tastes and preferences becoming cosmopolitan

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Economic development

• Consumer behavior is influenced by economic
  development
• Consumers in highly developed countries tend to
  demand extra performance attributes in their
  products
• Price not a factor due to high income level
• Consumers in less developed countries, value
  basic features as more important
• Price a factor due to lower income level
• Cars no air-conditioning, power steering, power
  windows, radios and cassette players.
• Product reliability is more important

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Product and technical standards

• Government standards can rule out mass production
  and marketing of a standardized product
• Differing technical standards constrain
  globalization of markets
• Different television signal frequencies

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Distribution strategy

• Choice of the optimal channel for delivering a
  product to the consumer
• Optimal strategy is determined by the relative
  costs and benefits of each alternative
• Depends on differences between countries
• retail concentration
• channel length
• channel exclusivity

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A typical distribution system
FIG 17.1
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Retail concentration

• Concentrated system
• common in developed countries
• contributing factors increase in car ownership,
  number of households with refrigerators and
  freezers and two-income households
• Fragmented system
• common in developing countries
• contributing factors great population density
  with large number of urban centers e.g. Japan
• uneven or mountainous terrain e.g. Nepal

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Channel length

• Refers to number of intermediaries between the
  producer and the consumer
• Determined by degree to which the retail system
  is fragmented
• Long distribution channel
• Short distribution channel

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Channel length

• Long distribution channel
• Fragmented retail system promotes growth of
  wholesalers and retailers
• Firms go through intermediaries such as
  wholesalers to cut selling costs
• Short distribution channel
• Concentrated retail system
• Firms deal directly with retailers

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Channel exclusivity

• Degree to which it is difficult for outsiders to
  access distribution channels
• Varies between countries
• Japan - exclusive systems because personal
  relations, often decades old play important role
  in stocking products
• Difficult for new firm to get shelf space as
  compared to an old firm

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Communication strategy

• Defines the process the firm will use in
  communicating the attributes of its product to
  prospective customers

Cultural barriers
Source effects
Noise levels
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Barriers to international communication

• Cultural Barriers
• Develop cross-cultural literacy
• Firm should use local input such as local
  advertising agency and sales force

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Barriers to international communication

• Source and country of origin effects
• Receiver of the message evaluates the message
  based on status or image of the sender
• Anti-Japan wave in US in 1990s
• Place of manufacturing influences product
  evaluations
• Often used when consumer lacks more detailed
  knowledge of the product
• Examples French wines, Italian clothes and
  German luxury cars

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Barriers to international communication

• Noise levels
• Amount of other messages competing for a
  potential customers attention
• Developed countries - high.
• Less developed countries - low.
• Standardized advertising strategy execution more
  difficult (culture, laws)

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Push versus pull strategy

• Push strategy emphasizes personal selling
• Requires intense use of a sales force
• Relatively costly
• Pull strategy depends on mass media advertising
• Can be cheaper for a large market segment
• Determining factors of type of strategy
• Product type and consumer sophistication
• Channel length
• Media availability

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Product type and consumer sophistication

• Pull strategy
• Consumer goods
• Large market segment
• Long distribution channels
• Mass communication has cost advantages

• Push strategy
• Industrial products or complex new products
• Direct selling allows firms to educate users
• Short distribution channels
• Used in poorer nations for consumer goods where
  direct selling only way to reach consumers

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Channel length

• Pull strategy
• Long or exclusive distribution channels
• e.g. Japan
• Mass advertising to generate demand to pull
  product through various layers
• Push Strategy
• In countries with low literacy levels to educate
  consumers

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Media availability

• Pull strategy
• Relies on access to advertising media
• Common in developed nations
• Push strategy
• Media availability limited by law
• All electronic media state owned with no
  commercial policy

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Global advertising

• Standardized
• Significant economic advantages
• Scarce creative talent
• Many global brand names
• Non-standardized
• Cultural differences
• Advertising regulations can be a restriction

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Pricing strategy

• Three aspects of international pricing strategy
• Price discrimination
• Strategic pricing
• Regulatory influence on prices

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Price discrimination

• Said to occur when consumers in different
  countries are charged different prices for the
  same product
• Two conditions necessary
• National markets kept separate to prevent
  arbitrage
• Capitalization of price differentials by
  purchasing product in countries where prices are
  lower and reselling where prices are higher
• Different price elasticities of demand in
  different countries
• Greater in countries with low income levels
  highly competitive conditions

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Elastic and inelastic demand curves
Fig 17.2
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Price discrimination
Fig. 17.3
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Strategic pricing

• Predatory pricing
• Using price as a competitive weapon to drive
  weaker competition out of a national market
• Firms then raise prices to enjoy high profits
• Firms normally have profitable position in
  another national market

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Strategic pricing

• Multipoint pricing strategy
• Two or more international firms compete against
  each other in two or more national markets
• A firms pricing strategy in one market may
  impact a rival in another market.
• Kodak and Fuji

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Strategic pricing

• Experience curve pricing
• Firms price low worldwide to build market share
• Incurred losses are made up as company moves down
  experience curve, making substantial profits
• Cost advantage over its less-aggressive
  competitors

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Regulatory influences on prices

• Antidumping regulations
• Selling a product for a price that is less than
  the cost of producing it
• Antidumping rules vague, but place a floor under
  export prices and limit a firms ability to
  pursue strategic pricing
• Article 6 of GATT, allows action against an
  importer if the product is sold at less than
  fair value and causes material injury to a
  domestic industry
• Competition policy
• Regulations designed to promote competition and
  restrict monopoly practices

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Configuring the marketing mix
Standards
Differences Here
Competition
Distribution
Economy
Culture
Govt Regs
Product Attributes
Pricing Strategy
Requires Variation Here
Communications Strategy
Distribution Strategy
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New product development

• The location of R D
• Rate of new product development greater in
  countries where
• More money spent on RD
• Underlying demand is strong
• Consumers are affluent
• Competition is intense

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Integrating RD, marketing and production

• Integrating RD, production and marketing ensures
• Project development driven by customer needs
• New products are designed for ease of manufacture
• Development costs are kept in check
• Time to market is minimized

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Integrating RD, marketing and production

• High failure rate ratio
• Between 33 and 60 of new products fail to earn
  adequate profits
• Reasons for failure
• Limited product demand
• Failure to adequately commercialize product
• Inability to manufacture product cost-effectively

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Cross-functional product development teams

• Objective of team to take a product development
  project from the initial concept development to
  market introduction
• Effective teams must have
• Heavyweight project manager
• One member from each key function
• Physically co-located to facilitate communication
• Clear plan and goals
• Own process for communication and conflict
  resolution