Marketing Mix for Global Markets

International Marketing
Develop marketing strategies by assessing the firms 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
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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

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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
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Total Product

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Foreign Environmental Forces

Sociocultural Forces
Dissimilar cultural patterns generally require changes in food and other consumer goods May require

Redesign of product
Different meanings of colors Different meanings of brand name

Translation of instructions or labels

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Foreign Environmental Forces

Legal Forces
Laws concerning
Pollution Consumer protection

Operator safety

Laws prohibiting classes of imports

Food and pharmaceuticals influenced by laws concerning purity and labeling Legal forces may prevent use of brand name worldwide In some countries brand may be registered to someone else
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 http://www.ssrana.in/Intellectual%20Prop erty/Domain%20Names/DomainName_ CaseLaw.aspx

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Foreign Environmental Forces

Economic Forces
Great disparity in income throughout world
Obstacle to product standardization Many industrialized country products too expensive for developing country consumers
Must either simplify the product or produce a different, less costly one

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Foreign Environmental Forces

Physical Forces
Climate and terrain prevent international product standardization Heat High humidity
Special packaging

High altitudes
Baking products and motors

Rough roads

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Promotional Strategies
Promotion
Any form of communication between a firm and its publics To bring about a favorable buying action and achieve long-lasting confidence in the firm and the product or service it provides

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Promotional Strategies
Distinct promotional strategies based on combination of three alternatives
Marketing the same physical product everywhere Adapting the physical product for foreign markets Designing a different physical product with (a) the same message (b) adapted message or (c) different message
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Six Common Promotional Strategies contd.

Product adaptation-message adaptation
In Latin America, Tang is sweetened and promoted as mealtime drink

Different product-same message

Product is produced in low cost plastic squeeze bottle for developing countries, but advertised the same

Different product for the same use-different message

Welding torches rather than automatic welding machines are sold in developing countries

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The Promotional Mix

Advertising Personal selling

Sales promotion
Public relations Publicity
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Advertising
Paid, nonpersonal presentation of ideas, goods, or services by identified sponsor Among promotional mix elements, advertising Has the greatest similarities worldwide Is formulated and executed through global ad agencies that have wholly owned subsidiaries, joint ventures, and working agreements with local agencies
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Global and Regional Brands

Reasons for increase in global and regional brands
Cost Better chance of obtaining one regional source for high-quality work Belief that single image throughout region is important Establishment of regionalized organizations with many functions centralized Growth of global and regional satellite and cable television
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Top Twenty Brands 2006

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Impact of Culture on Advertising

Directness vs. indirectness Comparison Humor Gender roles Explicitness Sophistication Popular vs. traditional Information content vs. fluff

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Advertising
Branding
Global, regional or national Managers may convert or use a combination Private brands Serious competitors Alliances with international retailers Trend common in Europe

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Advertising
Media
Satellite TV expands availability of media
International print media available
Readers Digest has 48 foreign editions

Cinema and billboards used heavily in Europe In developing countries, vehicles equipped with loudspeakers

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Advertising
Internet Advertising
An affluent, reachable audience
Web contacts feature interactivity, shrinks distance Involve customers in determining which messages and information they receive For some groups, Internet may be among the best media choices
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Advertising
Foreign Environmental Forces
Basic cultural decision for marketer: position the product as foreign or local Depends on the country, the product types, and the target market
Language often an issue
back translation plenty of illustrations with short copy
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Advertising
What should be the approach of the international advertising manager?
Think globally, but act locally Neither global nor local-glocal Pan regional approach Latin America Middle East Africa Atlantic
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Personal Selling
Importance of personal selling compared to advertising depends on
Relative cost Funds available Media available Type of product

Manufacturers of industrial products rely on personal selling Marketers may increase use of personal selling for consumer products in developing countries
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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

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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

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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.

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Public Relations
Various methods of communicating with the firms publics to secure a favorable impression
Markets firm
Improves image and overcomes negative perceptions May work through government agencies

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Pricing
Important and complex consideration in formulating marketing strategy One of the marketing mix elements that can be varied to achieve firms marketing objectives Made more complex by
Interaction with the other functional areas Environmental forces

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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

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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

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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

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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
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Standardizing Distribution
Disintermediation
Unraveling of traditional distribution structures Most often the result of being able to combine Internet with fast delivery services

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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 Countrys laws demand it

Factors Influencing Channel Selection

Market Product Company Middlemen
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Foreign Environmental Forces and the Marketing Mix Matrix

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Foreign Environmental Forces and the Marketing Mix Matrix

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Foreign Environmental Forces and the Marketing Mix Matrix

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Foreign Environmental Forces and the Marketing Mix Matrix

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