Transcript ib-intl-mkting - University of Winnipeg

Learning Objectives
Welcome to class of
International Marketing
Dr. Satyendra Singh
University of Winnipeg
Learning Objectives
Objectives:
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Explain why there are differences between domestic and
international marketing
Explain why international marketing managers may wish to
standardize the marketing mix regionally or worldwide
Explain why standardizing the marketing mix globally is
often impossible
Discuss the importance of distinguishing among the total
product, the physical product, and the brand name
Learning Objectives
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Explain why consumer products generally require greater
modification for international sales than do industrial
products or services
Discuss the product strategies that can be formed from
three product alternatives and three kinds of promotional
messages
Explain “glocal” advertising strategies
Discuss some of the effects the Internet may have on
international marketing
Discuss the distribution strategies of international
marketers
International Marketing
• Develop marketing strategies by assessing
the firm’s 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
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
Product Strategies
• Product is central to marketing mix
• Total product includes
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Physical product
Brand name
Accessories
After-sales service
Warranty
Instructions for use
Company image
Package
Total Product
Types of Products…
• Industrial Products
– Many can be sold unchanged worldwide
(computer chips)
– If changes are required, they may be cosmetic
(printing instructions in another language)
– In developing countries problems with
• Overload of equipment
• Maintenance
– Local legal requirements
Types of Products…
• Consumer Products
– Require greater modification to meet local market
requirements than do industrial products
– Some can be sold unchanged to certain market
segments
• Large automobiles, sporting equipment, and perfumes
– Greater dissimilarity as you go down the economic
strata
Types of Products
• Services
– Marketing of services similar to that of
industrial products
• Services easier to market globally compared to
consumer products
• Laws and customs may force changes
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
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
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
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
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
Promotional Strategies
• Distinct promotional strategies based on
combination of three alternatives
– Marketing
the
everywhere
– Adapting
markets
the
same
physical
physical
product
for
product
foreign
– Designing a different physical product with
• (a) the same message
• (b) adapted message or
• (c) different message
Six Common Promotional Strategies
• Same product-same message
– Avon, Maidenform
• Same product-different message
– Honda’s campaign in America is different than in Brazil
• Product adaptation-same message
– In Japan, Lever Brothers puts Lux soap in fancy boxes to encourage gift sales
• 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
The Promotional Mix
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Advertising
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Personal selling
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Sales promotion
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Public relations
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Publicity
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
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
Top Twenty Brands 2006
Impact of Culture on Advertising
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Directness vs. indirectness
Comparison
Humor
Gender roles
Explicitness
Sophistication
Popular vs. traditional
Information content vs. fluff
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
Advertising…
• Media
– Satellite TV expands availability of media
– International print media available
• Reader’s Digest has 48 foreign editions
– Cinema and billboards used heavily in Europe
– In developing countries, vehicles equipped with
loudspeakers
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
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
Advertising
• What should be the approach of the
international advertising manager?
– Think globally, but act locally
– Neither global nor local-”glocal”
– Pan regional approach
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Latin America
Middle East
Africa
Atlantic
Personal Selling…
• Importance of personal selling compared to advertising depends
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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
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
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
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.
Public Relations
• Various methods of communicating with the firm’s
publics to secure a favorable impression
– Markets firm
– Improves image and overcomes negative perceptions
– May work through government agencies
Pricing
• Important and complex consideration in
formulating marketing strategy
• One of the marketing mix elements that can
be varied to achieve firm’s marketing
objectives
• Made more complex by
– Interaction with the other functional areas
– Environmental forces
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
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
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
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
Standardizing Distribution
• Disintermediation
– Unraveling of traditional distribution
structures
• Most often the result of being able to combine
Internet with fast delivery services
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
• Country’s laws demand it
• Factors Influencing Channel Selection
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Market
Product
Company
Middlemen