Topic 11.

International Marketing
Physical Evidence:
Global companies try to create a worldwide or
regionally recognized brand by creating and
duplicating the same (or culturally-adapted) physical
evidence in all the firm’s outlets through out the world
or region. Tools are: building exterior, interior
decoration, furnishing, layout or overall ambience.
Taal Volcano
Eruption, Jan 12,
2020
Main Tasks of International Marketing
1
1
1
 Global Standardization Vs.
Multi-domestic Approach
 Glocalization Approach –
integrate/incorporate local differences into
global strategy.
 ‘Think Globally, Act Locally’
<How Nestle’s ‘Kitkat’ was reinvented in
Standardization for Japan>
Global Markets *The brand name “Kit Kat” was
transliterated into “Kitto katto” ( キット
カット ) in Japanese, which phonetically
mirrors the phrase “kitto katsu” ( きっと勝
つ ). “Kitto katsu” can translate into several
positive phrases, ranging from “surely
going to win” to “never fail.” As a result,
Kit Kat began marketing itself as a good
luck charm in all areas of Japanese society.
 Three Sets of Variables for
Standardization
Standardization for  The Markets Targeted
Global Markets  The Product and its Characteristics
 The Company Characteristics –
Resources and Policy
 Product Policy
 Product Policy
  Market environment mandates the
majority of product modifications.
 High tariffs to protect local industry –
Product Policy – esp. import of automobiles in
Southeast Asian countries: Many
Regional, global automobile companies have
Country, local assembly lines
characteristics  Non-tariff barriers such as product
standard, testing/approval procedures,
subsidies, red tapes
  Local industry standard and ISO 9001
 Touch of local taste – rice porridge in
McDonald’s Malaysia
Product Policy –
 Adapting to competitors offering
Regional,
 Stages of Economic Development –
Country, local Vernon’s PLC, Rapid rise in middle
characteristics class in Asia, Backward/Low-end
Innovation (Hyundai i10 in India)
  Need to adapt/modify inherent product
characteristics to local
conditions/regulation – some
ingredients of foods or drugs, legal
worldwide, are illegal in some
Product Policy – countries.
Product  Packing – material restrictions
(environmental hormones issue:
Characteristics KFDA regulation, etc)
 Labeling – Ethnicity factors in China.
 IS (Metric system)
  Halal (Meaning permissible to
Islamic Law)
 Repairs, parts, service: Imitation goods
problem (esp. auto parts)
Product Policy –  Peugeot in Korea – Beware of hidden
Product service cost
Characteristics  The country of origin – ‘Made in
China’ ‘Made in North Korea’ might
not be welcomed.
 Question for Adaptation:
is it worth it?
Product Policy –  It depends on the company’s capability to
Company - control costs
Considerations - to correctly estimate market potential
- to secure profitability
(Cross-subsidization, remember?)
  Decisions need to be based on
elaborate market research.
Product Policy –  Need to have specific criteria -
Company such as ROI, IRR
Considerations  Consistency in quality, price and
user perception is important
  How to manage portfolio of global,
regional, and local brands.
 Start by concentrating on the most
Product Policy – profitable product lines within the
limit of global resources and
Product Line operational capabilities then expand.
Management  Toyota case: It built strong position in
the world small-medium sized cars
first then moved into the highly
profitable luxury car (LEXUS)
  The goal of many marketers currently is to
create consistency and impact, both of
which are easier to manage with a single
worldwide identity.
 Global brands are a key way of reaching
this goal
 While some of the global brands are
Brand completely standardized, some elements of
Strategy the product may be adapted to local
conditions. These adjustments include
brand names (e.g., Tide, Whisper, and
Clairol in North America are Ariel,
Allways, and Wella in Europe, Starbucks in
China is 星巴克 /xingbake), positioning
(e.g., Giordano, casual wear in Hong Kong,
luxury brand in Korea)
All in a n
ame
https://www.visualcapitalist.com/top-100-most-
valuable-brands-in-2021/
  U$200billion is lost by US companies
Product Policy – both in domestic and international
markets– esp. software, entertainment
Product and pharmaceutical
counterfeiting,  Luxury Brands are normally tightly
imitation and controlling their distribution channels.
piracy Louis Vuitton, for example, has 100%
company owned global retail network.
  The only element in the marketing mix
that is revenue generating
 Three general categories of
international pricing situation:
Pricing - Export Pricing

Policy - Foreign Market Pricing

- Intra-company/
transfer-pricing
Basics of Pricing

 Fixed Cost
 Variable Cost
 Contribution Margin
= Price – Variable Cost
 Break Even Analysis
Breakeven point=
Fixed Cost/Contribution
Margin
 Export Pricing
 Three Options:
Pricing 1. Standard Worldwide Pricing: averaging
Policy unit costs of fixed, variable and export-
related costs.
2. Dual Pricing – Domestic Vs. Export
Price
3. Market-differentiated Pricing
 Dual Pricing: Domestic Vs. Export
Price
 Dual Pricing is based on;
 1. Cost-Plus Method: full allocation of

Pricing 
domestic and foreign costs to the products.
Where necessary, discounts are provided when

Policy – 
necessary.
2. Marginal Cost Method

Export  Direct production costs+Selling expense for

exports forms the floor price, below which

Pricing 
price cannot go.
It excludes fixed costs for plant, R&D,
domestic overhead and domestic marketing.
 3. Market-differentiated pricing: Based on
demand-situation-oriented strategy, being
consistent with the marketing concept.
 Price Escalation: The increase in export
prices due to additional marketing costs
Pricing related specially to exports.
Additional cost factors are
Policy –  Modification of goods
Quoting  Operational costs from export
activities – personnel, market research,
Export shipping, insurance, communication
Prices and so on
 Tariffs, taxes, FX risks
 Other hidden costs such as bribery
Pricing Five determining factors
Policy – 1. Corporate Objectives
2. Costs
Foreign 3. Customer behavior and market conditions
market 4. Market structure
pricing 5. Environmental constraints
  Such factors like taxes, import duties,
inflationary tendencies, FX
movements and government
Pricing Policy – regulations must be considered to
achieve financial optimization when
Transfer Pricing deciding the transfer price between
(Intra-company HQ/Subsidiaries
Pricing)  Most governments are paying close
attention to transfer pricing and
enforce strict arm’s length pricing.
 The channel decision is the most long-
term one of the marketing mixes and
involves control elements.
11 Cs of Channel Design
 Customer:
Distribution Demographic/Psychographic factors and
customer needs
Policy  Culture: Existing Channel Structure,
Regulations
 Competitors: Use the existing
structure more efficiently or build up a
totally different approach (IKEA case).
 11 Cs of Channel Design (continued)
 Company Objectives: Short-term push
Vs. long-term commitment etc.,
 Character: depending on characteristics
Distribution of goods Channel could be long
(commodities/staples) or short
Policy (specialized, expensive, bulky, or
perishable)
 Capital: Stronger the financial strength,
higher control and direct ownership.
 Cost: Cost for maintaining channel
 11 Cs of Channel Design
 Coverage: Number of areas to cover
both horizontally and vertically
 Control: The longer and looser the
channel, more difficult to manage
Distribution marketing mixes
 Continuity: Nurturing continuity
Policy through long-term commitment is
essential to maintain competitiveness
by deterring new entries.
 Communication: Aligning goals
of both marketer and intermediaries
through two-way communication
  Utilize governmental agencies and
embassies to start with.
 Private Sources:

Distribution  Professional services such as Dun &

Bradstreet
Policy – Selection
 Local trade directories
and Screening of
 Websites like tradekey.com,
Intermediaries
intermeding.com
 Get help from facilitating agencies like
bank, accounting firms, advertising
agencies, shipping liners, airlines.
 Problem with the agency/distributor: They do not have loyalty. They
will switch to other partners with better terms.
  In spite of overall rapid growth in E-
commerce globally, there is significant
Distribution Policy: variations in the levels of government
regulation, infrastructure and online
purchasing patterns country to country.
E-commece as a
 Besides main website, international
distribution marketers need to develop some
Channel country-specific websites with
individual content, including language
and currencies.
  Promotional Policy- Advertising
Promotional Policy:  Media Strategy
Advertising, Direct
Selling, Promotion, and
 Creative Strategy
Public Relations  Organization of the promotional
program
 1. Media Strategy
 Regarding selection of media vehicles
and the development of media
schedule
Promotional  Media Regulations: Prior Approval,
Censorship, separation between
Policy: programs and commercials,
Advertising restrictions on comparative claims and
gender role specifications.
 Mobile Phones/Smart TVs Coverage is
rapidly increasing
Media Strategy
 2. Creative Strategy – Dominating Factors
 The diffusion mechanism – Offline Vs.
Online
 The Criteria on which the consumer
Promotional will evaluate the product – Social
image/Brand Consciousness
Policy -  Product’s positioning - Giordano:
Advertising Value for money,
 The ideal situation is to have a World
Brand, or a strong regional Brand (e.g.
Shangri-La :grandness, luxury,
spaciousness)
 3. Organization of the promotional
program
 Large and small companies usually
Promotional outsource media-buying and creative
work to advertising agencies or
Policy - specialty marketing companies.
Advertising  In Asia-Pacific region local agencies
have stronger position than global
experts due to stronger local networks
and know-how.
  Highly priced, customer-specified
industrial goods need more direct
Promtional selling efforts. (e.g. Boeing/Northrop
Grumman when selling fighters)
Policy  Network Marketing, a most
– Direct representative form of direct selling,
has been very successful in Asia owing
Selling to culture of social relations and
collectivism. (Amway, Tupperware,
Nu Skin)
  Definition: Promotion that is not
advertising, personal selling or
publicity.
 Examples are; couponing, sampling,
Promotional premiums, consumer
education/demonstration, point-of-
Policy: purchase materials, direct mailing,
Sales Promotion competition events.
 Sales promotion directed at
intermediaries; Trade Shows,
Exhibition, Trade Discounts,
Cooperative Advertising.
  Definition: Marketing communications
function charged with executing
programs to earn public understanding
Promtional and acceptance.
 Internal communication especially in
Policy: large MNEs is important to create an
Public appropriate corporate culture and
value.
Relations  ESG(Environment, Social
Responsibility, Governance) is
becoming one of the core corporate
activities.
  3 Ps are more important marketing
mix factors in Service industry due to
The Extended  1) Customer contact
3Ps:
People, Process  2) Service is performed on-site and in
& Phsical front of the customers
Evidence 
3) Service has become integral part of
product offering, not limited to placing
orders and after-sales service
  The degree of service mindedness,
attitude, and consistency is something
experienced from the staff-customer
contacts.
The Extended 3  Nonverbal factors: Personal space and
Ps – People body language
Factor in Service  Verbal factors: Call center modules
 Other examples: Welcoming at the
doors, Colorful national costume
uniforms of Asian airlines flight
attendance (Thai Air, Singapore Air)
  The manner of delivering services is
determined by degree of customer
The Extended contact (availability, degree of
3 Ps – The performance and time spent etc.,)
 Product offering service method could
Process of be integrated into a unique value
Delivery proposition like
‘Fish Market in Seattle’
Flying Vegetables in Thailand
The Extended 3 Ps – Creating the
Physical Evidence
Key Takeaways
from Marketing
5.0
Marketing 5.0, by definition, is the application of
human-mimicking technologies to create,
communicate, deliver, and enhance value
across the customer journey. One of the critical
themes in Marketing 5.0 is what we call the next
tech, which is a group of technologies that aim
to emulate the capabilities of human marketers.
It includes AI, NLP, sensors, robotics,
augmented reality (AR), virtual reality (VR), IoT,
and blockchain. A combination of these
technologies is the enabler of Marketing 5.0.
The next tech is applied to help marketers to create, communicate, deliver,
and enhance value across the customer journey. The objective is to create
a new customer experience (CX) that is frictionless and compelling.  In
achieving it, companies must leverage a balanced symbiosis between
human and computer intelligence.
 And since we cannot teach computers the things we do not know how to
learn, the role of human marketers is still critical in Marketing 5.0. The
central discussion in Marketing 5.0, hence, is around selecting where
machines and people might fit and deliver the most value across the
customer journey.
How Technology can Enhance
Marketing
1. Make more informed decisions based on big data
analytics, allowing one-to-one marketing at scale
2. Predict outcomes of marketing strategies and tactics,
allowing marketers to stay ahead of the curve without
jeopardizing the brands from possible failures.
3. Bring the contextual digital experience to the physical
world. Internet of Things empowers businesses to
bring contextual touchpoints to the physical space,
facilitating omnichannel experience. Sensors enable
marketers to identify who is coming to the stores and
provide personalized treatment.
How Technology can Enhance
Marketing
4. Augment frontline marketers’ capacity to deliver value.
Technologies such as AI and NLP can replace lower value
routine tasks and empower frontline personnel to tailor
their approaches. AR/VR delivers engaging products.
Chatbots can handle lower value tasks with an instant
response.

5. Speed up marketing execution. Business can build on

open-source platforms and leverage co-creation to
accelerate go-to-market cycle. This approach needs not
only the backing of technology but right agile mindset.
Five Components of Marketing 5.0
1. Discipline 1: Data-driven Marketing
- The activity of collecting and analyzing data from
various sources and building a data ecosystem to drive
and optimaize marketing decisions.

2. Discipline 2: Agile Marketing

- The use of decentralized, cross-functional teams to
conceptualize, design, develop, and validate products
and marketing campaigns rapidly.

Application 1: Predictive Marketing

Application 2: Contextual Marketing
Application 3: Augmented Marketing
When
Everything
is
Polarized
….
When everything is polarized, with a widening gap
between the top and bottom socioeconomic classes, there
are only two meaningful ways to position your brands and
companies. Polarization limits the markets in which
businesses can play. But most importantly, it limits growth
opportunities, especially amid the slowing economy and
the proliferation of players. Inclusive and sustainable
marketing solves the problem through a better
redistribution of wealth, which in turn will return the society
to its original shape. Companies must embed the concept
in their business model, investing back into the society
with purpose.
And businesses must utilize technology as it will
play a major role by accelerating the progress
and opening up opportunities for everyone.