Download Part Six Managing International Operations

Part Six
Managing International Operations
Chapter Sixteen
Marketing Globally
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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
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Marketing Orientations
• International marketing strategies depend
on companies’ orientations that include:
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Production
Sales
Customer
Strategic marketing
Societal marketing
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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
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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.
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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
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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.”
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Potential obstacles in International
pricing
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Government intervention
Market diversity
Export price escalation
Fluctuations in currency value
Fixed versus variable pricing
Relations with suppliers
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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:
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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
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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
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Branding Strategies
• A brand is an identifying mark for products
or services.
• Global branding is hampered by:
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language differences
expansion by acquisition
nationality images
laws concerning generic names
• Global brands do help develop a global
image
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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.
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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:
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Financial capability.
Connections with customers.
Fit with a company’s product.
Other resources.
Trustworthiness.
Compatibility with product image.
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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.
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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
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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.
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