International Marketing
International Marketing
Domestic Market Extension
Multi-domestic
Global Marketing
Domestic Market
Extension
 Sales of domestic products in int. markets.
 Domestic orientation
 International Market secondary
 Firm seeks markets similar to domestic.
 Little adaptation of product or marketing mix.
 Usually produced domestically
Multi-Domestic Orientation
Separate operations in each country production, marketing etc.
Different strategies and marketing mixes
Very little interaction
Markets could be very different.
Global-Marketing
Orientation
Views the world as one market.
Develop product and marketing strategies
for world markets.
Standardize as far as possible, adapt
where necessary.
Economies of scale, transfer of
knowledge and technology, global image,
and better competitive position.
International vs. Domestic
- Marketing Mix.
 Standardization/Differentiation mainly in terms
of Product and Promotions.
 Product and Promotion Extension
(Standardization)
 Product Extension/Promotion Adaptation
 Product Adaptation/Promotion Extension
 Dual Adaptation (Differentiated)
 Product Invention
Five International Product
and Promotion Strategies
Promotion
Product
Do not change
promotion
Do not change
product
Adapt
product
Straight
extension
Product
adaptation
Develop new
product
Product
invention
Adapt
promotion
Communication
adaptation
Dual
adaptation
Three components which
could be changed.
Core component; packaging component;
and support services component.
Core component - Physical product,
design features, functional features.
Culture and use; standards or regulations;
minor changes easier; major changes
costly; functional features easy to adapt.
Three components which
could be changed.
Packaging component - Price, quality,
styling, color, trademark, brand name, etc
(psychological features).
Economic or environmental
requirements;Govt. regulations;
Distribution requirements;
consumer/cultural requirements.
Three components which
could be changed.
Support services component - deliveries,
warranty, repair and maintenance, spare
parts etc.
Market characteristics, size, competition,
level of development etc.
Country of origin effects.
Stereotypes about products and countries.
English Tea, French Perfume, Chinese
Silk, Italian leather, Japanese cars and
electronics.
Usually product specific.
Stereotypes based on level of
industrialization.
Can be overcome with good marketing.
Pricing.
 Objectives depend upon company orientation
 Standard worldwide Pricing – Based on average unit costs of fixed,
variable and export related costs.
 Dual Pricing – Domestic and export prices are differentiated.
Cost-plus pricing and marginal cost method.
Cost-plus – full allocation of domestic and foreign
costs.
Marginal cost – Fixed costs for plants, R&D, Domestic
overhead, and domestic marketing are disregarded.
 Market-differentiated pricing – demand–oriented. Marginal costs
and export-related costs considered.
Variables that influence
international pricing
 Taxes and tariffs - Specific duty, Ad Valorem,
Combination.
 Inflation - Time, Payment terms, possible price
control.
 Exchange rate Fluctuation - Prices of products
and profits.
 Middlemen and transportation costs - Longer,
diverse, underdeveloped, smaller order
quantities, could all increase costs.
 Parallel Imports.
Parallel Imports/ Gray
Markets.
Value of currencies.
Pricing policies.
Costs of transportation less than price
differential.
Price controls or quotas.
Exclusive distribution agreements.
In the US – Gray market for Cars, Watches,
cameras etc. – valued at $6-10 billion.
Global Advertising and
Promotion Effort.
Global or standardized advertising
strategy.
Pattern Advertising (similar basic message
with some local variation)
Customized.
Marketing strategy; Cultural differences;
Behavior in terms of the product; Media
availability.
Global advertising
strategy.
Developed on a global basis not exported.
Most large firms do not use, only 8% of
U.S. multi-national firms.
Pattern advertising.
Plan globally act locally.
Broad outlines or basic positioning given
but details can be adapted.
Assuming that there are some differences
in culture and consumer behavior even if
primary function is the same.
Creative challenges.
 Media Regulations –
comparative advertising – e.g., Germany prohibits
use of superlatives.
time allocations – e.g., In Italy 12% ads per hour.,
special taxes – e.g., Japan,
type of product, type of copy and illustration, etc.
 Language limitations - translating ad slogans, literacy
levels, use of different languages.
Creative challenges.
Cultural diversity - Symbols, colors, tastes,
values and beliefs etc. - subcultures.
Production and cost limitations - Poor
quality printing, lack of high grade paper,
film editing and processing facilities, high
comparative cost for quality.
Media - Availability, Audience data,
international media.
Advertising agencies.
 Local agency.
 Company owned agency.
 Multinational Agency with local branches.
Survey says 32.5% using single agency worldwide.
20% two agencies.
5% using three.
10% using four.
32.5% using more than four.
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International Marketing