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International Marketing
Griffin & Pustay
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Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall
International Business, 6th Edition
chapter 16
Chapter Objectives
• Characterize the nature of marketing
management in international business
• Discuss the basic kinds of product
policies and decisions made in
international business
• Identify pricing issues and evaluate
pricing decisions in international business
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Chapter Objectives (continued)
• Identify promotion issues and evaluate
promotion decisions in international
business
• Discuss the basic kinds of distribution
issues and decisions in international
business
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Marketing
Marketing is “the process of planning
and executing the conception, pricing,
promotion, and distribution of ideas,
goods, and services to create
exchanges that satisfy individual and
organizational objectives.”
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International Marketing
International Marketing is the
extension of these marketing activities
across national boundaries.
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Figure 16.1 International Marketing as an
Integrated Functional Area
Operations
Management
Accounting
Marketing
Finance
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Human
Resource
Management
Market Strategy Must Support
Business Strategy
Differentiation
Cost Leadership
Focus
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Marketing Mix Issues
• How to develop the firm’s product(s)
• How to price those products
• How to sell those products
• How to distribute those products to
the firm’s customers
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Figure 16.2 Elements of the Marketing Mix
for International Firms
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Key Decision-Making Factors
• Standardization versus customization
• Legal forces
• Economic factors
• Changing exchange rates
• Target customers
• Cultural influences
• Competition
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Standardization versus Customization
Ethnocentric Approach
Polycentric Approach
Geocentric Approach
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Table 16.1 Standardized
International Marketing
Advantages
Disadvantages
• Reduces marketing
costs
• Ignores different
conditions of product
use
• Facilitates centralized
control of marketing
• Promotes efficiency in
R&D
• Results in economies
of scale in production
• Reflects the trend
toward a single global
marketplace
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• Ignores local legal
differences
• Ignores differences in
buyer behavior patterns
• Inhibits local marketing
initiatives
• Ignores other
differences in individual
markets
Table 16.1 Customized
International Marketing
Advantages
Disadvantages
• Reflects different
conditions of use
• Increases costs/
inefficiencies
• Acknowledges local
legal differences/
differences in buyer
behavior
• Inhibits centralized
control of marketing
• Accounts for other
differences in
individual markets
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• Reduces economies
of scale in
production
• Ignores the trend
toward a single
global marketplace
Product
Product comprises both the set of
tangible factors that the consumer can
see or touch (the physical product and its
packaging) and numerous intangible
factors such as image, installation,
warranties, and credit terms.
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Factors Affecting the
Standardization of Products
Legal forces
Economic
factors
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Cultural
influences
Brand names
Factors Affecting
Pricing Policies
Business strategy
Competitive environment
Costs of doing business
Exchange rate fluctuations
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Pricing Policies
Standard Price
Policy
Two-Tiered
Pricing
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Market
Pricing
Figure 16.3a Determining the
Profit-Maximizing Price
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Figure 16.3b Determining the
Profit-Maximizing Price
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Conditions for Market Pricing
• Firm must face different demand and/or
cost conditions in the countries in which it
sells its products
• Firm must be able to prevent arbitrage
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Risks to Market Pricing Policy
Charges of dumping
Damage to brand name
Development of a gray market
Consumer resentment
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Promotion Mix
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Advertising
Personal Selling
Sales Promotion
Public Relations
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Factors Affecting Advertising Strategy
• The message it wants to convey
• The media available for conveying
the message
• The extent to which the firm wants
to globalize its advertising effort
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Advertising
Message: the facts or impressions the
advertiser wants to convey to potential
customers
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Advertising (continued)
Medium: the communication channel
used by the advertiser to convey a
message
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Global Advertising
A customer entering
this domino parlor in
Egypt encounters no
language barriers in
knowing that the
establishment
serves Coke.
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Personal Selling
Personal Selling: making sales on the
basis of personal contacts
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Advantages of Personal Selling for
International Firms
• Local sales representatives understand
local culture, norms, and customs
• Personal selling promotes close,
personal contact with customers
• Personal selling makes it easier for firm
to adopt valuable market information
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Sales Promotion
Sales promotion: comprises specialized
marketing efforts designed to offer an
incentive for behavior such as coupons, instore promotions, sampling, direct mail
campaigns, cooperative advertising, and
trade fair attendance.
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Public Relations
Public Relations consists of efforts
aimed at enhancing a firm’s reputation and
image with the general public, as opposed
to touting the specific advantages of an
individual product or service.
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Distribution Issues
Physical
transportation
mode
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Merchandising
mode
Table 16.2 Advantages/Disadvantages of
Transportation Modes
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Mode
Advantages
Disadvantages Sample
Products
Train
Safe, reliable,
inexpensive
Limited to rail
routes, slow
Airplane
Safe, reliable, fast Expensive,
limited access
Jewelry,
medicine
Truck
Versatile,
inexpensive
Small size
Consumer goods
Ship
Inexpensive,
good for larger
products
Slow, indirect
Automobiles,
furniture
Electronic
Media
Fast
Unusable for
many products
Information
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Automobiles,
grains
Basic Parts of a
Distribution Channel
Manufacturer
Wholesaler
Retailer
Customer
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Figure 16.4 Distribution
Channel Options
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Copyright © 2010 Pearson Education, Inc.
publishing as Prentice Hall