Selected issues on international marketing programme

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Selected issues on international marketing
programme
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Focused on Product and Services

• The opportunities for international marketers of
  consumer goods and services today have never been
  greater
• New consumers are springing up in many emerging
  markets, which promise to be huge markets in the
  future
• In the more mature markets consumers tastes
  become more sophisticated and complex due to
  increase in purchasing power
• The difference between tangible products and
  services
• The difference between business-to-consurmer and
  business-to-business markets

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Product policy Analyzing Product Components

• A product is multidimensional, and the sum of all
  its features determines the bundle of
  satisfaction (utilities) received by the customer
• The many dimensions of products can be divided
  into three distinct components
• Core components
• Packaging components
• Support services components
• These components include all a products
  tanglible and intangible elements and provide the
  bundle of utilities the market receives from use
  of the product.

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Which products for international markets?

• The same as for home market
• Adapted products
• Standardized products
• New products

Define the reasons for each option!
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Four degrees of adaptation combinations
product and promotion
Non- customization
Adapting the message
Adapting the portfolio
Custom product design
Fully leverage global product and marketing
Customize Marketing message and language
Customize mix of product and services based
on local needs
Create market specific products and services
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Branding for international markets

• Branding dimensions
• Global brands
• Regional brands
• Local brands
• Producers brand
• Private brands
• Brand partnership
• Brand portfolio

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• International
• product
• life cycle

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The international product life cycle

• Macroeconomic approach
• Typically, demand first grows in the innovating
  country. Production, consequently, takes place
  first in the innovating country. As the product
  matures and technology is diffused production
  occurs in other industrialised countries and then
  is less developed countries.
• Microeconomic approach
• Due to different economic levels in different
  countries, a specific product can be in different
  PLC stages in different countries.

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International pricing strategies

• Cost-plus.
• Strategic pricing penetration pricing, skimming
  (including strategies for pricing a new product)
• Experience curve pricing
• Demand-based pricing
• Pricing across products (product line pricing)
• Total package price
• Psychological pricing.
• In comparison to domestic pricing
  strategies, the decisions are much more complex,
  because they are affected by a number of
  additional external factors, such as fluctuations
  in exchange rates, accelerating inflation in
  certain countries and the use of alternative
  payment methods such as leasing and barter for
  instance.

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Influences on international pricing
Overall corporate strategy
Consumer characteristics
Desired brand position
Government price controls
Supply costs
Responsiveness of sales to price changes
Selling points of the product
Price
Nature of local competition
Local credit periods
Rate of market growth
Stability of exchange rates
Distributors markups
Consumer response to promotional activities
Local inflation rates
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Factors affecting the price setting in
international marketing
External factors???

• Environmental factors
• Market factors
• Firm-level factors
• Product factors

Internal factors???
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What to add to general pricing strategies?

• Pricing across countries
• Standardization internationalization of
  competition, homogenization of competitive
  structures, international activities of large
  retailers
• Differentiation differences in price segments,
• strengths of local competitors, retailer
  power, consumer preferences

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International pricing taxanomy

1. Global price leader global market leader, market
   and cost-oriented global prices, global
   competition but local differences
2. Global price follower .....
3. Multilocal price setter
4. Local price follower

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European pricing strategies
Lowest price
20 in price differences
Future European price corridor
Highest price
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Reasons for lowering prices in foreign markets

• Lower consumer incomes.
• Intense local competition.
• RD costs have already been covered.
• Weak demand for the product.
• Reasons for increasing prices in
• foreign markets ????

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Price escalation

• Price escalation affects all firms involved in
  cross-border transportation.
• Due to additional shipping or other kinds of
  transportation, insurance, tarrifs and
  distribution charges, the exported product costs
  more in the export market than at home.

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Distribution policy

• Entry mode
• Physical distribution
• INCOTERMS
• Distribution channels

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Distribution decision

• Channel decisions external factors
• Customer characteristics
• Nature of product
• Nature of demand (location)
• Competition
• Legal regulations/local business practice
• Channel decisions internal factors
• Decisions concerning structure of the channel
• Managing and controlling distribution channels
• Managing logistics

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Considerations in transport and distribution
policy

• Cost vs. speed.
• Nature of the product (weight, perishability,
  dimensions).
• Customer preferences.
• Value of the goods.
• Intermediate handling and storage charges.
• Working capital tied up in goods in transit.

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International distribution channel
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Objectives of international advertising

• Increasing sales.
• Attracting new customers.
• Altering customer behaviour.
• Communicating brand values.

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The case for standardization

• Consumer characteristics are becoming homogeneous
  across borders.
• Urbanization is increasing.
• Internationalization of media has led to
  converging lifestyle choices.

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The case for customization

• Cultural differences between markets.
• Language differences.
• Differences in educational backgrounds.
• Non-availability of some media.
• Different attitudes towards advertising.
• Legal requirements in different markets.

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Advantages of using a local agency

• Gives the foreign firm a local image.
• Closer links between agency and media.
• More commitment to the market.
• Local flair and creativity.

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Objectives of international advertising

• Increasing sales.
• Attracting new customers.
• Altering customer behaviour.
• Communicating brand values.

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The case for standardization

• Consumer characteristics are becoming homogeneous
  across borders.
• Urbanization is increasing.
• Internationalization of media has led to
  converging lifestyle choices.

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The case for customization

• Cultural differences between markets.
• Language differences.
• Differences in educational backgrounds.
• Non-availability of some media.
• Different attitudes towards advertising.
• Legal requirements in different markets.

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International media planning problems

• Differing definitions of terms such as
  circulation and readership.
• Differing segmentation of media.
• Large number of possible media to screen.
• Absence of reliable information on pass-alongs
  of magazines.

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Advantages of using a local agency

• Gives the foreign firm a local image.
• Closer links between agency and media.
• More commitment to the market.
• Local knowledge and creativity.

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International media planning problems

• Differing definitions of terms such as
  circulation and readership.
• Differing segmentation of media.
• Large number of possible media to screen.
• Absence of reliable information on pass-alongs
  of magazines.

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Objectives of international PR

• Establish a brand image.
• Create awareness of the enterprise.
• TOOLS OF PR
• Sponsorship.
• Press releases.
• Publicity stunts.
• Brochures and reports.
• Media events.

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Factors contributing to the growth of Public
Relation

• Ability to contact opinion leaders.
• Large-scale privatizations.
• Escalating costs of advertising.
• General increase in promotion.
• Rising interest in corporate image.
• Wider share ownership.
• High cost of bad publicity.

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Drivers for growth in direct marketing

• New technology.
• Escalating costs of mass media.
• Availability of good-quality lists.
• Developments in IT.
• Improved mail infrastructure.
• Improved telecomms infrastructure.

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Elements in the export plan

• Reasons for exporting.
• Markets to be entered.
• Competitive situation in the target markets.
• Products to be offered.
• Research methods.
• Promotional methods.
• Export formalities.
• Organization.
• Human resource requirements.
• Transport and distribution.
• Objectives and budgets.
• Contingency plans.