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Marketing Process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individuals and organizational objectives 16-1 ©2004 Prentice Hall Marketing Mix How to develop the firm’s products How to price those products How to sell those products How to distribute those products to the firm’s customers Who is the Target Market? 16-2 ©2004 Prentice Hall The Elements of the Marketing Mix for International Firms Marketing Mix Product 16-3 Pricing Promotion Place ©2004 Prentice Hall Key Decision-Making Factors 16-4 Standardization versus customization Legal forces Economic factors Changing exchange rates Target customers Cultural influences Competition ©2004 Prentice Hall Standardization versus Customization Should the firm adopt an ethnocentric approach? Should it adopt a polycentric approach? Should it adopt a geocentric approach? 16-5 ©2004 Prentice Hall Standardized International Marketing Advantages Reduces marketing costs 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 16-6 Disadvantages Ignores different conditions of product use Ignores local legal differences Ignores differences in buyer behavior patterns Inhibits local marketing initiatives Ignores other differences in individual markets ©2004 Prentice Hall Customized International Marketing Advantages Reflects different conditions of product use Acknowledges local legal differences Accounts for differences in buyer behavior patterns Promotes local marketing initiatives Accounts for other differences in individual markets 16-7 Disadvantages Increases marketing costs Inhibits centralized control of marketing Creates inefficiency in R&D Reduces economies of scale in production Ignores the trend toward a single global marketplace ©2004 Prentice Hall Product Life Cycle Intro Growth Maturity Decline Sales Profit 16-8 ©2004 Prentice Hall Break Even Analysis $ Total Revenue Curve = Selling Price X Units Cost Curve = Fixed Costs + Variable Costs BE = Total Fixed Costs/Price – Variable Costs Units 16-9 ©2004 Prentice Hall Pricing Policies Standard price policy Two-tiered pricing Market pricing 16-10 ©2004 Prentice Hall 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 16-11 ©2004 Prentice Hall Risks to Market Pricing Complaints about dumping Damage to its brand name Development of a gray market for its products Consumer resentment against discriminatory prices 16-12 ©2004 Prentice Hall Promotion Mix Advertising Personal Selling Sales Promotion Public Relations 16-13 ©2004 Prentice Hall 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 16-14 ©2004 Prentice Hall 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 16-15 ©2004 Prentice Hall Distribution Issues Physically transporting its goods and services from where they are created to the various markets in which they are to be sold Selecting the means by which to merchandise its good in the markets it wants to serve 16-16 ©2004 Prentice Hall Basic Parts of a Distribution Channel The manufacturer A wholesaler The retailer The actual customer 16-17 ©2004 Prentice Hall Distribution Channel Options 16-18 ©2004 Prentice Hall Using E-Commerce http://www.prettygarlic.com and disintermediation. 16-19 ©2004 Prentice Hall