International Business Management_International Marketing

International Marketing

International Marketing
Domestic Market
Extension
Multi-domestic
Global Marketing

Domestic Market
Extension
 Sales of domestic products in int. markets.
 Domestic orientation
 International Market secondary
 Firm seeks markets similar to domestic.
 Little adaptation of product or marketing
mix.
 Usually produced domestically

Multi-Domestic Orientation
 Separate operations in each country
- production, marketing etc.
 Different strategies and marketing
mixes
 Very little interaction
 Markets could be very different.

Global-Marketing
Orientation
 Views the world as one market.
 Develop product and marketing
strategies for world markets.
 Standardize as far as possible, adapt
where necessary.
 Economies of scale, transfer of
knowledge and technology, global image,
and better competitive position.

International vs. Domestic
- Marketing Mix.
 Standardization/Differentiation mainly in
terms of Product and Promotions.
 Product and Promotion Extension
(Standardization)
 Product Extension/Promotion Adaptation
 Product Adaptation/Promotion Extension
 Dual Adaptation (Differentiated)
 Product Invention

Five International Product
and Promotion Strategies

Promotion

Product
Do not change
promotion

Do not change
product

Adapt
product

Straight
extension

Product
adaptation

Develop new
product

Product
invention
Adapt
promotion

Communication
adaptation

Dual
adaptation

Three components which
could be changed.
 Core component; packaging component;
and support services component.
 Core component - Physical product,
design features, functional features.
 Culture and use; standards or
regulations; minor changes easier; major
changes costly; functional features easy
to adapt.

Three components which
could be changed.
 Packaging component - Price,
quality, styling, color, trademark,
brand name, etc (psychological
features).
 Economic or environmental
requirements;Govt. regulations;
Distribution requirements;
consumer/cultural requirements.

Three components which
could be changed.
 Support services component deliveries, warranty, repair and
maintenance, spare parts etc.
 Market characteristics, size,
competition, level of development
etc.

Country of origin effects.
 Stereotypes about products and countries.
 English Tea, French Perfume, Chinese Silk,
Italian leather, Japanese cars and
electronics.
 Usually product specific.
 Stereotypes based on level of
industrialization.
 Can be overcome with good marketing.

Pricing.
 Objectives depend upon company orientation
 Standard worldwide Pricing – Based on average unit costs of
fixed, variable and export related costs.
 Dual Pricing – Domestic and export prices are differentiated.
Cost-plus pricing and marginal cost method.
Cost-plus – full allocation of domestic and foreign
costs.
Marginal cost – Fixed costs for plants, R&D,
Domestic
overhead, and domestic marketing are disregarded.
 Market-differentiated pricing – demand–oriented. Marginal costs
and export-related costs considered.

Variables that influence
international pricing
 Taxes and tariffs - Specific duty, Ad Valorem,
Combination.
 Inflation - Time, Payment terms, possible price
control.
 Exchange rate Fluctuation - Prices of products
and profits.
 Middlemen and transportation costs - Longer,
diverse, underdeveloped, smaller order
quantities, could all increase costs.
 Parallel Imports.

Parallel Imports/ Gray
Markets.
 Value of currencies.
 Pricing policies.
 Costs of transportation less than price
differential.
 Price controls or quotas.
 Exclusive distribution agreements.
 In the US – Gray market for Cars, Watches,
cameras etc. – valued at $6-10 billion.

Global Advertising and
Promotion Effort.
 Global or standardized advertising
strategy.
 Pattern Advertising (similar basic
message with some local variation)
 Customized.
 Marketing strategy; Cultural
differences; Behavior in terms of the
product; Media availability.

Global advertising
strategy.
 Developed on a global basis not
exported.
 Most large firms do not use, only 8%
of U.S. multi-national firms.

Pattern advertising.
 Plan globally act locally.
 Broad outlines or basic positioning
given but details can be adapted.
 Assuming that there are some
differences in culture and consumer
behavior even if primary function is
the same.

Creative challenges.
 Media Regulations –
comparative advertising – e.g., Germany prohibits
use of superlatives.
time allocations – e.g., In Italy 12% ads per hour.,
special taxes – e.g., Japan,
type of product, type of copy and illustration, etc.
 Language limitations - translating ad slogans, literacy
levels, use of different languages.

Creative challenges.
 Cultural diversity - Symbols, colors,
tastes, values and beliefs etc. subcultures.
 Production and cost limitations - Poor
quality printing, lack of high grade paper,
film editing and processing facilities, high
comparative cost for quality.
 Media - Availability, Audience data,
international media.

Advertising agencies.
 Local agency.
 Company owned agency.
 Multinational Agency with local branches.
Survey says 32.5% using single agency worldwide.
20% two agencies.
5% using three.
10% using four.
32.5% using more than four.