International Marketing

MODULE 4

 International Product Planning Product Objectives Product planning Foreign Collaboration / Investment Product design strategy

Product Policy and Planning

International Product Planning

Corporate Objectives Business in the Country
Host Country Objectives

Product Objectives Product Offering

Marketing mix

Customer Satisfaction

1. Activities 2. Financial indicators 3. Desired position

Product Objectives

Product Planning
Day to Day issues Strategic issues Mass needs

Foreign Collaboration / Investment

International Product Life Cycle Specialized Products

Coco-cola Nestle Refreshments Co.

Foreign Collaboration / Investment

SONY AND ERICSSON
Tata Steel-Corus: $12.2 billion : January 30, 2007 Largest Indian take-over After the deal TATAS became the 5th largest STEEL co. 100 % stake in CORUS paying Rs 428/- per share Image: B Mutharaman, Tata Steel MD; Ratan Tata, Tata chairman; J Leng, Corus chair; and P Varin, Corus CEO. Vodafone-Hutchison Essar: $11.1 billion : Telectom sector 11th February 2007 2nd largest takeover deal 67 % stake holding in hutch Image: The then CEO of Vodafone Arun Sarin visits Hutchison Telecommunications head office in Mumbai.

Foreign Collaboration / Investment

Ranbaxy-Daiichi Sankyo: $4.5 b : Pharmaceuticals sector June 2008 Acquisition deal largest-ever deal in the Indian pharma industry Daiichi Sankyo acquired the majority stake of more than 50 % in Ranbaxy for Rs 15,000 crore 15th biggest drugmaker Image: Malvinder Singh (left), ex-CEO of Ranbaxy, and Takashi Shoda, president and CEO of Daiichi Sankyo.
ONGC-Imperial Energy:$2.8billion : January 2009 Acquisition deal Imperial energy is a biggest chinese co. ONGC paid 880 per share to the shareholders of imperial energy ONGC wanted to tap the siberian market Image: Imperial Oil CEO Bruce March.

Foreign Collaboration / Investment

NTT DoCoMo-Tata Tele: $2.7 b : $2.7 b November 2008 Telecom sector Acquisition deal Japanese telecom giant NTT DoCoMo acquired 26 per cent equity stake in Tata Teleservices for about Rs 13,070 cr. Image: A man walks past a signboard of Japan's biggest mobile phone operator NTT Docomo Inc. in Tokyo.

Tata Motors-Jaguar Land Rover: $2.3 billion : $2.3 billion March 2008 (just a year after acquiring Corus) Automobile sector Acquisition deal Gave tuff competition to M&M after signing the deal with ford Image: A Union flag flies behind a Jaguar car emblem outside a dealership in Manchester, England. The Igate acquisition of Patni

Product Design Strategy

Standardization Customization Adaption

1. 2. 3.

Product Design Strategy

Decision Criteria Standardization: A Common Practice Rewards of Adaption

Decision Criteria

Failure due to standardization GE debacle in small-appliance field in germany Polariods difficulties with Swinger Camera in France

Decision Criteria

Nature of Product Market Development Cost Benefit Relationship Legal Requirement Competition Support System Physical Environment Market Condition

Standardisation: A Common Practice

Brand Name Physical characteristics of product Packaging

Rewards of Adaptation
1. 2. Obligatory Product Adaption Mandatory for entry External Environment factors Discretionary or voluntary Product Adaption

Rewards of Adaptation
Colgate, Levi Jeans, Ponds cold cream, Dominos Pizza Adapting products to local situations

Developing an International Product Line..

International Product Line

Extension of Domestic Line Introducing Additional Products to the international Line Introducing New products to a Host Country Alternative Ways of Seeking new Products to Foreign Markets Rationale for new products Adoption and Diffusion of New products

Product Related Characteristics

Relative Advantage Compatibility Complexity Divisibility Communicability

Market Related Characteristics

Customer Innovativeness Need Perception Economic Ability

Brand Names Trademarks

Brand Names
One Brand Name Worldwide Modifying Brand Names for each market Different brands for different markets Company name as brand name Brand Piracy Identifying country of origin Private Branding for foreign markets

Pricing Strategy

Pricing Strategy
The Role of Price

Price Standardization
Pricing Decisions

Alternative Pricing Strategies

Dumping Price Distortion Transfer Pricing

Pricing Decisions 1.Supply and Demand

OPEC, Oil Cartel

Waterford Glass

Pricing Decisions 2.Cost

Low price to penetrate

Cost-plus Method Full cost

Marginal cost pricing

Pricing Decisions 3. Elasticity and cross elasticity of demand

Sony
Mazda Honda Toyota

Levis 501 jeans

Pricing Decisions 4. Exchange rate

Nissan Each single yen

increase against German Mark, Nissans revenue were reduced by 4 billion yen.

Pricing Decisions 5. Market Share

Economies of scale

Late entrants
Compaq Fujitsu, Japan

manufacturer

Pricing Decisions 5. Market Share

Hysteresis A type of market

inertia that says the relationship between two or more variables critically depend on past history.

Pricing Decisions 6. Tariffs and Distribution Costs 7. Culture

Fixed price Flexible or negotiated price

(price haggling)

Alternative Pricing Strategies

Eastern Air lines subsidized

financing Discounts GM Bundle or Unbundle the product Ford and Detroit, US Auto maker

Dumping
A form of price discrimination, is

the practice of charging different prices for the same product in similar markets.
Boeing and Mconnell Douglas

accused airbus of receiving subsidies

Types of Dumping
1. Sporadic Dumping

2. Predatory Dumping
3. Persistent Dumping

4. Reverse Dumping

Price Distortion Government is actively involved in buying and selling local and foreign goods. Political influence on agricultural sector in japan

Promotion Strategy

Promotion Strategy
1. Promotion and

Communication 2. Promotion Mix 3. Personal Selling

Personal Selling

Varying Quality and Style of Personal Selling Intercultural Negotiation Motivation Telemarketing Expatriate Personnel

4. Publicity The nature of Publicity The management of Publicity Negative Publicity

5. Sales Promotion

The nature of sales promotion Restrictions Premiums and gifts Price reduction, Discounts and sales Samples Sweepstakes, games and contests

Advertising Strategy

Advertising Strategy The role of advertising Patterns of Advertising Expenditure Advertising and Regulations Advertising Media

Standardized International Advertising

Three Schools of thought Feasibility and Desirability Research and empirical evidence A decision-making framework Global advertising true geocentricity