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Transcript
Part Six Managing International Operations Chapter Sixteen Marketing Globally 16-1 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Chapter Objectives • To understand a range of product policies and the circumstances in which they are appropriate internationally • To grasp the reasons for product alterations when deciding between standardized versus differentiated marketing programs among countries • To appreciate the pricing complexities when selling in foreign markets • To interpret country differences that may necessitate alterations in promotional practices • To comprehend the different branding strategies companies may employ internationally • To discern complications of international distribution and practices of effective distribution • To perceive why and how emphasis in the marketing mix may vary among countries 16-2 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Marketing Orientations • International marketing strategies depend on companies’ orientations that include: Production Sales Customer Strategic marketing Societal marketing 16-3 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Production Orientation • Companies focus primarily on production either efficiency or high quality - with little emphasis on marketing. • Used internationally for certain cases: Commodity sales Passive exports Foreign-market segments or niches 16-4 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Other Orientations • Sales orientation: a company tries to sell abroad what it can sell domestically and in the same manner on the assumption that consumers are sufficiently similar globally. • Customer orientation: the product and method of marketing it are varied • Strategic Marketing orientation: combines production, sales, and customer orientations • Social Marketing orientation: Companies consider effects on all stakeholders when selling or making their products. 16-5 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Segmenting and Targeting Markets • The most common way of segmenting markets is through demographics and psychographics • Three basic approaches to international segmentation: By country By global segment By multiple criteria 16-6 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Why Firms Alter Products • Legal factors are usually related to safety or health protection. • Examination of cultural differences may pinpoint possible problem areas. • Personal incomes and infrastructures affect product demand. • Although some standardization of products would eliminate wasteful alterations, there is resistance because: A changeover would be costly. People are familiar with the “old.” 16-7 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Potential obstacles in International pricing • • • • • • Government intervention Market diversity Export price escalation Fluctuations in currency value Fixed versus variable pricing Relations with suppliers 16-8 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall The Push-Pull Mix • Promotion may be categorized as push, which uses direct selling techniques, or pull, which relies on mass media. • For each product in each country, a company must determine its promotional budget as well as the mix between push and pull • Factors in Push-Pull Decisions: Type of distribution system Cost and availability of media to reach target markets Consumer attitudes toward sources of information Price of the product compared to incomes 16-9 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Standardization of Advertising Programs • Advantages of standardized advertising include: Some cost savings. Better quality at local level. Rapid entry into different countries. • Major problems for standardizing advertising among countries are: Translation Legality Message needs 16-10 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Branding Strategies • A brand is an identifying mark for products or services. • Global branding is hampered by: language differences expansion by acquisition nationality images laws concerning generic names • Global brands do help develop a global image 16-11 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Distribution Strategies • Distribution is the course - physical path or legal title - that goods take between production and consumption. • Distribution reflects different country environments: It may vary substantially among countries. It is difficult to change. 16-12 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Choosing Distributors and Channels • Distribution may be handled internally: When volume is high. When companies have sufficient resources. When there is a need to deal directly with the customer because of the nature of the product. When the customer is global. To gain a competitive advantage. • Some evaluation criteria for distributors include their: Financial capability. Connections with customers. Fit with a company’s product. Other resources. Trustworthiness. Compatibility with product image. 16-13 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall The Challenge Of Getting Distribution • Distributors choose which companies and products to handle. Companies: May need to give incentives. May use successful products as bait for new ones. Must convince distributors that product and company are viable. • Five factors that often contribute to cost differences in distribution are infrastructure conditions, the number of levels in the distribution system, retail inefficiencies, size and operating-hour restrictions, and inventory stockouts. 16-14 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall The Internet and Electronic Commerce • Although the Internet offers new opportunities to sell internationally, using the Internet does not negate companies’ needs to develop sound programs within their marketing mix 16-15 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Managing the Marketing Mix • The difference between total market potential and companies’ sales is due to gaps: Usage - less product sold by all competitors than potential. Product line - company lacks some product variations. Distribution - company misses geographic or intensity coverage. Competitive - competitors’ sales not explained by product line and distribution gaps. 16-16 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall