Download IB-CH16 International Marketing

Chapter 16:
International
Marketing
International Business, 4th Edition
Griffin & Pustay
16-1
©2004 Prentice Hall
Chapter Objectives_1
 Characterize the nature of marketing
management in international business
 Discuss the basic kin 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_2
 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
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
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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
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Marketing Mix
 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 The Elements of the
Marketing Mix for International Firms
Marketing Mix
Product
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Pricing
Promotion
Place
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Key Decision-Making Factors
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Standardization versus customization
Legal forces
Economic factors
Changing exchange rates
Target customers
Cultural influences
Competition
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Standardization versus Customization
 Should the firm adopt an ethnocentric
approach?
 Should it adopt a polycentric
approach?
 Should it adopt a geocentric approach?
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Table 16.1 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
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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
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Table 16.1 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
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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
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Prices of these t-shirts in Rome converted from
several hundred lira to less than 13 Euro
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Pricing Policies
 Standard price policy
 Two-tiered pricing
 Market pricing
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Figure 16.3a Determining the ProfitMaximizing Price
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Figure 16.3b Determining the ProfitMaximizing 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
 Complaints about dumping
 Damage to its brand name
 Development of a gray market for its
products
 Consumer resentment against
discriminatory prices
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Promotion Mix
 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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A customer entering
this domino parlor in
Egypt encounters no
language barriers in
knowing that the
establishment serves
Coke
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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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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
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Table 16.2 Advantages and Disadvantages of
Different Modes of Transportation for Exports
Mode
Advantages
Disadvantages
Sample Products
Train
Safe, reliable,
inexpensive
Limited to rail
routes, slow
Automobiles,
grains
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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Basic Parts of a Distribution Channel
 The manufacturer
 A wholesaler
 The retailer
 The actual customer
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Figure 16.4 Distribution Channel
Options
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