Transcript Thoughts from the Front Lines: Teaching the Large Section

Teaching International
Marketing
David A. Griffith
Department of Marketing & Supply Chain Management
The Eli Broad College of Business
Michigan State University
Agenda

The Basics
– Basics of marketing
• Segmentation, Targeting and Positioning
• Marketing Mix
– Basics of international marketing

Teaching Approaches
– Presentation: Global vs. Comparative
– Observational
– Experiential
– Application
Focus
Marketing is an organizational
function and a set of processes for
creating, communicating and
delivering value to customers and for
managing customer relationships in
ways that benefit the organization and
its stakeholders.
Segmentation,
Targeting and
Positioning
The Complete Process
Market
Segmentation
Identify and describe
market segments
Market
Targeting
Evaluate segments
and decide which
to go after
Market
Positioning
Design a product or
service to meet a
segment’s needs and
develop a
marketing mix that
will create a competitive
advantage in the minds
of the selected target
market
Market Segmentation
Identifying distinct groups of consumers
whose purchasing behavior differs from
other in important ways.
 Marketing mix adjusted to reflect differing
purchasing patterns in segments.

–
–
–
–
Geography
Demographics
Socio-cultural factors
Psychological factors
Market Segmentation
 Two
main issues in the differences
between countries
– The structure of market segments
– The existence of segments that
transcend national borders
Market Targeting and Positioning

Marketers evaluate the attractiveness of each potential
segment and decide which of these groups they will try to
turn into customers
–
–
–
–

Mass
Differentiated
Concentrated
Custom
Developing a marketing strategy aimed at influencing how a
particular market segment perceives a product or service in
comparison to the competition
– 4 common positioning errors
• Underpositioning: lack of differentiation
• Overpositioning: too narrow
• Confused: too many things to too many people
• Doubtful: consumer just doesn’t believe it
Marketing Mix
Marketing Mix
Price
Product
Consumers
Place
Promotion
Marketing Mix:
Product
Product Attributes

A product is a bundle of attributes. If
consumer needs were the same all over,
a firm could simply sell the same product
worldwide. Unfortunately, differences in
the three following areas often
necessitate adaptations
– Cultural differences
– Economic differences
– Product and technical standards
Cultural Differences

Range of dimensions:
–
–
–
–


Social structure
Language
Religion
Education
Most important - the impact of tradition
Some tastes and preferences becoming
cosmopolitan
Economic Differences

Consumer behavior is influenced by
economic development
– Consumers in highly developed countries
tend to have extra performance attributes
in their products
– Consumers in less developed countries
tend not to demand these extra
performance attributes
Product and Technical Standards
Government standards can prevent the
introduction of global products
 Different technical standards impede
global markets, as well

– Come from idiosyncratic decisions
made long ago
Marketing Mix:
Place
Distribution Strategy

Three different distribution systems:
– Retail concentration: number of retailers
• Cost/benefit of each alternative
vary from country to country
– Channel length: levels of channel members
• Longer the channel in a country, the higher the price
• Shorter channel in a country, lower price
– Channel exclusivity: access
• Match to positioning of product in country
A Typical Distribution System
Manufacturer
Inside the
Country
Manufacturer
Outside the
Country
Wholesale
Distributor
Retail
Distributor
Final
Customer
Import
Agent
Marketing Mix:
Price
Pricing Strategy
Price discrimination
 Strategic pricing
 Regulatory factors

Pricing Strategy

Price discrimination: Different prices, different
countries, same product
– Charging what the market will bear
– Two factors:
• Must keep national markets separate
• Different price elasticities

Arbitrage:Charging different prices in different
countries for same product
– Doesn’t always work
– Sometimes it does

Income level and competitive conditions determine
elasticity
– Elasticity (price) tends to be be greater in countries with low
income levels
– Elasticity (demand) tends to be greater in countries where
there are many competitors
Strategic Pricing

Predatory pricing:
– Using price as a competitive weapon

Multipoint pricing strategy:
– When two or more international firms compete against
each other in two or more national markets
– A firm’s pricing strategy in one market may impact a
rival in another market

Experience curve pricing:
– Firms price low worldwide to build market share.
Incurred losses are made up as company moves down
experience curve
Regulatory Influences on Prices

Antidumping regulations:
– Selling a product for a price that is less than the cost of
producing it
• Predatory pricing and experience curve pricing may violate
regulations
– Antidumping rules place a floor under export prices and limit a
firm’s ability to pursue strategic pricing

Competition Policy:
– Promote competition
– Restrict monopoly practices
– Can limit the prices a company can charge in a given country
Nike Pricing Strategy
Price discrimination across markets
Multi-point pricing
Marketing Mix:
Promotion
Communications Strategy

Effectiveness of international communications can be
impacted by:
– Cultural barriers
• Need to develop cross-cultural literacy
Communications Strategy

Effectiveness of international communications can be
impacted by:
– Cultural barriers
• Need to develop cross-cultural literacy
– Source and country of origin effects
• Receiver of the message evaluates it based upon the status of the
sender
– Country of origin effects:
• Emphasize/de-emphasize foreign origin
Communications Strategy

Effectiveness of international communications can be
impacted by:
– Cultural barriers.
• Need to develop cross-cultural literacy
– Source and country of origin effects
• Receiver of the message evaluates it based upon the status of the
sender
– Country of origin effects:
• Emphasize/de-emphasize foreign origin
– Noise levels
• Tends to reduce the effectiveness of a message
• Developed countries - high
• Less developed countries - low
– Push versus Pull:
• Push emphasizes personal selling
• Pull depends on mass media advertising
Teaching Approaches

Teaching Approaches
– Presentation
• Global
• Comparative
– Observational
• Seeing: television shows, movies, etc.
• Perceiving: literature
– Experiential
• Taste it, See it, Feel it
• Providing Assistance
– Application
• Cases
• Live Cases
Takeaways

Planning
– Topical content
– Global vs. comparative vs. mixed

Engage Students
– Make it apply
• What they eat, buy or wear
– Seeing differences
– Experiencing differences
– Unpredictability of International Marketing
• Finding the bizarre
• Finding the humorous