Transcript Product Adaptation

THE INSTITUTE OF CHARTERED
ACCOUNTANTS OF SRI LANKA
MARKETING STRATEGY
International Marketing Strategy
Hafeez Rajudin
Chartered Marketer
MBA(SJSU), DipM(UK), PG. Dip. Bsc & Fin Adm (ICASL),
FInstCM(UK), FCIM(UK), FSLIM
INTERNATIONAL MARKETING
“The world is shrinking rapidly with
the advent of faster communication,
transportation and financial flows –
products developed in one country
are finding enthusiastic acceptance
in other countries”.
MAJOR DECISIONS IN INTERNATIONAL MARKETING
Looking at the Global
Marketing environment
Deciding whether to go
International
Deciding which markets to
enter
Deciding how to enter
the markets
Deciding on the global
Marketing program
Deciding on the global
Marketing organization
Looking at the Global Marketing
Environment
• Economic Environment
• Legal & Political Environment
• Cultural Environment
Economic Environment
• Subsistence Economies
• Raw Materials Exporting
Economies
• Industrializing Economies
• Industrial Economies
Political & Legal Environment
• Attitude towards International
buying
• Government bureaucracy
• Political Stability
• Monetary regulations
Cultural Environment
• Each country has its own folkways,
norms and taboos.
• When deciding global marketing
strategies, companies must
understand how cultures affect
consumer reactions in each of its
world markets.
• In turn they must also understand
how their strategies affect local
cultures/
Deciding Whether to go International
• Not all companies need to
venture into international
markets to survive.
• This decision depends upon the
stage of the company life cycle.
(Explanation)
Deciding which Markets to Enter
Before going abroad, the
company should try to define
its:
• International marketing
objectives and policies.
• Choose how many countries to
enter.
• Market potential
Indicators of Market Potential
Demographic
Characteristics
• Education
• Population size
and growth
• Population age
composition
Geographic
Characteristics
• Climate
• Country size
• Population
density (urban,
rural)
• Transportation
structure and
market
Indicators of Market Potential
Economic factors
• GDP size and
growth
• Income distribution
• Industrial
infrastructure
• Natural resources
• Financial and
human resources
Socio cultural
factors
• Consumer
lifestyles,
beliefs and
values
• Business norms
and approaches
• Social norms.
• Languages
Indicators of Market Potential
Political and Legal
factors
• National priorities
• Political stability
• Government
attitude towards
global trade
• Government
bureaucracy
• Monetary and trade
regulations
Deciding How to Enter the Market
“Once a company has decided
to sell in a foreign country, it
must determine the best mode
of entry”
MARKET ENTRY STRATEGIES
EXPORTING
• Direct
• Indirect
Joint Venturing
Direct Investment
• Licensing
• Contract
Manufacturing
• Management Contracting
• Joint Ownership
• Assembly facilities
• Manufacturing
facilities
Amount of Commitment, Risk, Control and Profit Potential
MARKET ENTRY STRATEGIES
Exporting:
Entering a foreign market by selling
goods produced in the company’s
home country, often with little or no
modifications.
MARKET ENTRY STRATEGIES
Joint Venturing
Entering foreign markets by
joining with foreign companies
to produce or market a product
or service
MARKET ENTRY STRATEGIES
Licensing
A method of entering a foreign
market in which the company
enters into an agreement with a
licensee in the foreign market,
offering the right to use a,
manufacturing process, trade
mark, patent, trade secret, or
other item of value for a fee or
MARKET ENTRY STRATEGIES
Contract Manufacturing
A joint venture in which a company
contracts with manufacturers in a
foreign market to produce the
product or provide its service.
MARKET ENTRY STRATEGIES
Management Contracting
A joint venture in which the domestic
firm supplies the management knowhow to a foreign company that
supplies the capital; the domestic
form exports management services
rather than products.
MARKET ENTRY STRATEGIES
Joint Ownership
A joint venture in which a
company joins investors in a
foreign market to create a local
business in which the company
shares joint ownership and
control.
MARKET ENTRY STRATEGIES
Direct Investment
Entering a foreign market by
developing foreign-based
assembly or manufacturing
facilities.
Deciding on the Global Marketing
Program
• Companies that operate in one or
more foreign markets must decide
how much, if at all, to adapt their
marketing mixes to local conditions.
• At one extreme are global
companies that use a
STANDARDADIZED MARKETING MIX,
selling largely the same products
and use the same marketing
approaches worlwide.
Deciding on the Global Marketing
Program
• At the other extreme is an
ADAPTED MARKETING MIX. In
this case, the producer adjusts
the marketing mix elements to
each target market, bearing
more costs but hoping for a
larger market share and return.
ADAPTING PRODUCT & PROMOTION
TO A GLOBAL MARKET
1.
2.
3.
4.
5.
Straight Extension
Communication adaptation
Product Adaptation
Dual Adaptation
Product Invention
FIVE INTERNATIONAL PRODUCT AND PROMOTION STRATEGIES
PRODUCT
PROMOTION
Don’t change Product
Don’t change
Promotion
1. Straight Extension
Adapt Product
Develop new Product
3. Product Adaptation
5. Product
Invention
Adapt
Promotion
2. Communication
Adaptation
4. Dual Adaptation
FIVE INTERNATIONAL PRODUCT AND
PROMOTION STRATEGIES
1.
Straight Product Extension
Marketing a product in a foreign market without any
change.
2.
Product Adaptation
3.
4.
Adapting a product to meet local conditions or wants in
foreign markets.
Product Invention
Creating new products or services for foreign markets.
Communication Adaptation
A global communication strategy of fully adapting
advertising messages to local markets.
DISTRIBUTION CHANNELS
WHOLE-CHANNEL CONCEPT FOR INTERNATIONAL MARKETING
seller
Seller’s
Headquarters
Organization for
International
marketing
Channels
Between
nations
Channels
Within
nations
Final User
Or
Buyer