INTERNATIONAL MARKETING AND STRATEGY MIX

Group -6 Anjali Rawat (4) Avinash D. (12) Kiran Kumari (24) Parag Rastogi (34) Rajdeep Saikia (44)

INTERNATIONAL MARKETING IS:
“ The Process of planning & conducting transactions across the national borders to create exchanges that satisfy the objectives of individuals & organizations” Its form ranges from export-import trade, to licensing, franchising, joint ventures, wholly owned subsidiaries & management contracts

Basic principle of marketing strategy will still apply, but their implementation, complexity & intensity may differ substantially.  Marketing strategy of Chinese good may differ in Pakistan & US.

ROUTES OF ENTRY IN INTERNATIONAL MARKETS
Licensing  Franchising  Joint ventures  Strategic alliances

LICENSING
An agreement on which one firm permits another to use its intellectual property(patents, trademarks, copyrights, technology etc.) in exchange for compensation, typically royalty.  Benefits: does not require huge capital investments or detailed involvement. No risk of expropriation. Eg. Chemists

FRANCHISE:
Franchising is a form of licensing that grants wholesaler or retailer exclusive right to see a product or service in a specified area.  Eg. Dominos Pizza, Coffee Republic and McDonald's Restaurants.

JOINT VENTURE:
A collaboration of two or more organizations each contributing assets, owns the subsidiary & share risk.  Eg. Mahindra and Renault, Bharti -walmart

STRATEGIC ALLIANCE

SA are formal or informal arrangements between two or more companies with common business objectives. Pepsicos strategic alliance with Warner Brothers International Theatre.( Warner Brothers is in possession of 358 movie screens at 43 theatres in 6 countries: Great Britain , Germany, Portugal, Italy & Japan) This was of strategic importance as half of the world movie fans between 15 and 24 age group would visit the theatres to watch these movies

ADJUSTING THE MARKETING MIX
3 ways: 1.Standardized approach to international marketing in which product are marketed with little or no modification. 2.Multidomestic Approach in which local condition are adopted in each and every target market. 3.Globalization Approach to international marketing in which differences are incorporated into regional or global strategy that will allow for differences in implementation.

INTERNATIONAL MARKETING

Among different countries, why and how:
 It

makes sense to vary the attributes of strategy may vary and promotion strategies may

products
 Distribution  Advertising

vary
 Pricing

strategy may vary

GLOBALIZATION OF MARKETS?
  

Levitt’s “Converging commonality” has not happened universally Consumer product tastes converged less than industrial product specifications Media, communications means have  made consumers world-wide more aware of their mutual preferences  have contributed to creation of world brands  have caused market segments to emerge across some national markets--inter-market segments

MARKET SEGMENTATION

The process of identifying groups of consumers whose purchasing behavior is unique in important ways
 Is

based on demography, geography, socialcultural factors, psychological factors firms to adjust marketing mix to meet the needs of separate market segments

 Allows

Marketing mix variables: product-price-place (distribution)-promotion

MARKET SEGMENTATION ACROSS NATIONAL MARKETS

Standardization: companies may
 Offer

same products

 Adjust

balance of marketing mix to market segments with similar needs across countries different products

Adaptation: companies may
 Offer  Adjust

balance of marketing mix to market segments with differing needs across countries

MARKETING STRATEGY

Standardization (Global Integration Pressures)  Efficiencies through integrated R&D, production, marketing
Advantages International uniformity disadvantages Wholly undifferentiated

Reinforces positive consumer Trade barriers perceptions  Economies of scale Quality is improved What to standardize?

Adaptation (Local Responsiveness Pressures)  Buyer behavior (cultural, economic influence, brand perception--country of origin idea)  Laws, regulations  Local environment needs  Responsiveness to local condition shifts

Implications on marketing mix • Eg. – Coca cola • Product and process- standardized • Distribution and promotion- adapted

INTERNATIONAL MARKETING MIX: PRODUCT

Attributes need to be adapted to a greater or lesser extent to satisfy  Consumer preferences/tastes due to culture  Economic development levels affect consumer behavior  National product/technical standards state mandated  Eg. Hamburger: meat type, taste, texture, size  Automobile: power, design, quality, performance, comfort, size/capacity

A-STAR

The company has high end interiors and comfort features to fit into the lifestyles of the European customers and at the same time provide a low cost car Took U.S. as benchmark neglecting Japan

Canon

INTERNATIONAL MARKETING MIX: PLACE
 

Optimal channel a company chooses to deliver the product The most locally responsive element of marketing mix because distribution channels vary dramatically across countries  Retail system: concentrated-fragmented  Channel length: long, short  Channel exclusivity

INTERNATIONAL MARKETING MIX: PROMOTION
How firm communicates the product attributes / benefits to customers  Citibank was formerly serving the premium segment in India market.  Minimum deposit required was Rs 3 Lakhs which was reasonable in Dollar terms  The company soon realized that this shall not be a successful strategy in India and hence changed it strategy to serve the Mass Market.

Suzuki- India Markets the same model of Astar car under the A Star Brand in India & Alto in Europe  Ford when launched Escort in different markets in the world at some places positioned and promoted as sports car and luxury car at different places.

Barriers to international communication  Cultural barriers-McDonalds Strategy:  In India they can't use Beef-Tallow to fry the fries and burger cutlets. (due to religious beliefs - cows are sacred to Hindus)  Similarly, no bacon in the middle east(pork is abolished by Islam)  Design, symbolism and aesthetics sometimes are important. Eg. look at Japanese cars from the front - they have a smiling face.

 Source

effects (country of origin effects)like economic developments eg. In remote regions of Africa there would be no means of electricity on which to run TVs or radios  Nestle’s promotional strategy took setback in Paris whereas hit in Santiago  Switzerland, commercials on television are allowed on a limited scale.  Others being- work ethics, target population(buyer v/s user)

Standardized advertising strategy possible; standardized advertising strategy execution more difficult (culture, laws)  Eg. Local laws-it is not acceptable to show naked legs in adverts displayed in Muslim countries

INTERNATIONAL MARKETING MIX: PROMOTION

Push v/s Pull strategies  Push strategy: personal selling emphasis
Industrial products; complex new products  Short distribution channels  Few print or electronic media

 Pull

strategy: mass media advertising emphasis
Consumer goods  Long distribution channels  Marketing message may be carried via print / electronic media

OTHER CHOICES OF MEDIA
Web based- Chinese sites are full of symbols and images  International tradeshows, trade missions  Sponsorship (international sporting events)  Public relations (oil companies)

INTERNATIONAL MARKETING MIX: PRICE
 Price

discrimination: demand elasticity  Influences on pricing for international marketing. o The cost of manufacturing, distributing and marketing o The physical location of production plants o Fluctuations in foreign currencies affect pricing o The price that the international consumer is willing to pay o Business objectives o The price that competitors in international markets are already charging.

 Strategic

pricing Predatory (quick share-of-market focus):  lower prices to drive competitors out, then raise prices eg.-France Telecom and Sky TV. Multipoint pricing:  pricing in one market may have an impact in another market; subsidize low pricing in one market from profits in another  Regulatory issues:  antidumping, monopoly restriction

Price discrimination strategy (to maximize consumer demand) eg. Direct price discrimination: Cola prices in Mexico Brazil and Eastern Europe are lower than prices in Asia even though cost of concentrate is same.  Premium Pricing-Used where there is a uniqueness about the product or service. This approach is used where a a substantial competitive advantage exists. luxuries such as Cunard Cruises, Savoy Hotel rooms

Economy Pricing- no frills low price. The cost of marketing and manufacture are kept at a minimum. Supermarkets often have economy brands for soups, spaghetti, etc.  Price Skimming- Charge a high price because you have a substantial competitive advantage. Manufacturers of digital watches used a skimming approach in the 1970s.  Premium pricing, penetration pricing, economy pricing, and price skimming are the four main pricing policies/strategies. They form the bases for the exercise.  

OTHER STRATEGIES
Psychological Pricing- respond on an emotional, than on rational basis  Product Line Pricing-Basic wash could be $2, wash and wax $4, and the whole package $6.  Optional Product Pricing-For example airlines will charge for optional extras such as guaranteeing a window seat or reserving a row of seats next to each other.  Captive Product Pricing-For example a razor manufacturer will charge a low price and recoup its margin (and more) from the sale of the only design of blades which fit the razor.

Product Bundle Pricing-This also serves to move old stock. Videos and CDs are often sold using the bundle approach.  Promotional Pricing-BOGOF (Buy One Get One Free).  Value Pricing-This approach is used where external factors such as recession or increased competition force companies to provide 'value' products and services to retain sales e.g. value meals at McDonalds.

THANK YOU