Transcript Document

International Marketing Strategy
Introduction
Domestic and international marketing principles are similar
• Environmental differences often cause managers to
apply these principles differently abroad
Market Size Analysis
Total market potential—estimate of the possible sales of a
product for all companies, and the estimate of your own
company’s market-share potential
Present income and population are the major indicators for
potential sales of most products
 As incomes change, product demand may change
 Other factors affect demand
Gap Analysis
Method for estimating a company’s potential sales by
identifying market segments it is not serving adequately
• Sales potential exists when sales are lower than the
estimated market potential
•
Usage gap
•
Distribution gap
•
Product line gap
•
Competitive gap
Standardization vs. Adaptation
Definition
• standardisation: use same marketing mix
across nations
• it is matter of degree
Ex: Snapple
Standardization vs. Adaptation (cont’)
Standardization is favourable when
a. Target country is
• Culturally similar
eg) Europe
• Economically similar
b. Products are
• Industrial product
• High-tech product
eg) semiconductor, computers
• Core/tangible products are more likely to be
standardised than augmented product.
Standardization vs. Adaptation (cont’)
c. Target consumers
• have similar life style/taste
• highly mobile
• eg) Urban life style
d. Firm wants
• close control
• consistent brand image (eg. global brands)
eg) Levis
e. Competitors are marketing
• standardised products
International Pricing
Price Setting (influencing factors)?
Price Setting (cont’)
Relationship between domestic and export price
– can be higher (Why?)
– can be lower (Why?)
Price Escalation
Price difference b/t the exporting country and the import country.
Ex: An American-Built Jeep Cherokee Makes the Trip to Japan
Item
Amount of
Price Escalation
Ex- w orks price
Exchange rate adj.
0
Total
$19,100
$1,333
$20,433
S hipping
$200
$20,633
Customs fees
$682
$21,315
D istributor margin
$1,569
$22,884
Inspection,
accessories
$1,100
$23,984
Added options, prep
$1,925
$25,909
Final sticker price
$5,463
$31,372
Source: Th e N ew Y ork Ti mes, Ma y 16, 1995
Strategic Options to Deal With Price Escalation
–
–
–
–
–
???
shorten distribution system
eliminate costly features
assemble in foreign market (eg. free trade area)
eliminate costly features. repackage for low
tariff classification
– foreign production and sourcing
International Distribution Decisions
Distribution is a process in which the ownership
of the goods is transferred from the producer to
the consumer by means of physical handling and
movement.
Channel of Distribution is an organized network of
agencies and institutions which, in combination,
perform all the activities required to link producers
with users to accomplish the marketing task.
Channel System
1. Long vs. Short Distribution
a. Short: specialised, efficient, large size, large coverage
eg) Mfg  (Wholesale)  Retail  consumer
eg) direct Marketing; Mfg  consumers (Ex?)
b. Long: general, less efficient, small size. limited coverage: fragmented
eg) mfg.  wholesaler1  wholesaler2  retailer1 retailer2 
consumer
eg) Italy, Japan
• small (fewer employees), fragmented (complex) channel structure
eg) "Mom & Pop" type of stores
Channel System (cont’)
2. Direct vs. Indirect Channel
a. Advantages of going direct (??)
eg) Toys R Us and Dell in JPN market
b. Disadvantages (??)
Channel System (cont’)
When to go direct? Compare and Justify.
• consumer vs. industrial market: industrial: direct/short
• manufacturing goods vs. service (direct, short)
• concentrated (short, direct) vs. fragmented market
International Marketing Communication
Decisions
Encoding
Message/
Channel
Decoding
Noise
Basic Model of Communication
Receiver
Response
Feedback
Source/
Sender
Cultural Context B
Cultural Context A
Message channel
Encoding
Message
translated into
appropriate
meaning
Noise
Competitive activities, other salespeople, confusion
and so on
Advertising
Media and or
personal
sales force
Decoding
Encoded
message
interpreted
into meaning
Feedback
Information
source
Markerer with
a product
Evaluation of
communications
process and
measure of action
by receiver
Receiver
Action by
consumer
responding to
decoded
message
Globalized vs. Localized Campaigns
Globalized campaigns: using the same message and creative
execution across all (or most) international markets.
Localized campaigns: applying different messages and creative
executions for each foreign market a firm has entered.
Pattern campaign: designing from the start to accept modification
to fit local national market conditions, yet still keeping some
common elements across all foreign countries.
Qs: what promotes companies to use globalized campaigns?
How about localized campaigns?
Coca-Cola: “Pattern Advertising”
• Basic approach
– Specific communication strategy
– Specific Audience
• Local adjustments
– Words and the lyrics are translated
– Basic adjustments made to the copy
– Visual adjustments made to the copy
International Advertising Campaigns
• Standardization whenever possible
When do you know it is possible and how to do it?
When your product gets ready for it.
When the market gets ready for it.
• Adaptation whenever necessary
When do you know it is necessary and how to do it?
When the cultural taboos tell you so.
When the culture perception tells you so.