INTERNATIONAL

BUSINESS
ENVIRONMENTS & OPERATIONS

14E

Copyright
DANIELS©●2013 Pearson ●
RADEBAUGH Education,
SULLIVAN Inc. 16-1
publishing as Prentice Hall
 CHAPTER 16

MARKETING GLOBALLY
Copyright © 2013 Pearson Education, Inc.
16-2
publishing as Prentice Hall
 INTRODUCTION
• Marketing principles in foreign
markets are more or less similar to
those in domestic markets
– Product
– Price
– Promotion
– Place

• However, some or all elements may

need to be adapted to better fit local
markets

16-3
 MARKETING STRATEGIES
• Marketing strategy depends on marketing orientation
– Production
• Consumers want lower price
• Little emphasis on marketing
• Passive in terms of marketing efforts, focus remains on
production
– Sales
• Consumers are similar abroad
• Using the same sales mechanism abroad
• Active in terms of sales promotion

16-4
 MARKETING STRATEGIES
Customer
Focuses on customers preferences
Varying selling and marketing strategies in both domestic
and foreign markets
Related and unrelated diversification decisions to add
variety to product lines
Strategic marketing
Combing production, sales and customer orientations
Continuous adaptation
Social marketing
Selling products keeping in mind all the broader
stakeholders including customers, society and environment
etc.
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 MARKETING STRATEGIES
Firms can segment and target
markets
By country
Choosing a specific country
By global segment
Choosing global segments
based primarily on income
Mass versus niche marketing

16-6
 WHY FIRMS ALTER PRODUCTS
• Firms alter products for
– Legal reasons
• Packaging, environmental regulations
• Pharmaceuticals.
– Cultural reasons
• Religion, heritage
• Food chains, garments
– Economic reasons
• People’s purchasing power, economic
conditions
• Comforts, necessities

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PRICING STRATEGIES
• Potential obstacles in international pricing
– Government intervention
• Set minimum or maximum pricing
• Prohibit certain pricing practices
– Psychological pricing
– Market diversity
• Consumers may be willing to pay higher prices in
some segments than others

16-8
 PRICING STRATEGIES
 Pricing tactics
 Skimming strategy
Charging a high price for a new product and then progressively
lowering the price
 Penetration strategy
Introducing a product a low price to boost sales
 Cost-plus strategy
Pricing at a desired margin over cost
 Export price escalation
 Prices of exports are higher because of added transportation costs and
markups of distribution channels
 Fluctuations in currency value

16-9
 PRICING STRATEGIES
• Gray market
– the selling and handling of
goods through unofficial
distributors
– Decreases a company’s profit
margins substantially
– US cars sold to US citizens
through unauthorized Canadian
dealers since cars cost less in
Canada.

16-10
PROMOTION STRATEGIES
• Promotion
– the presentation of messages
intended to help sell a product
or service
• Push-pull mix
– Push
• uses direct selling
techniques
– Pull
• relies on mass media

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 PROMOTION STRATEGIES
• Advantages of standardized advertising
– lower cost
– common global image
– rapid entry into multiple countries
• However, firms could have problems with
– Message translation
– Legalities with respect to content
– Specific market needs

16-12
 BRANDING STRATEGIES
• Brand
– an identifying mark for a product or service
– Instant recognition

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 BRANDING STRATEGIES
• Advantages of a worldwide brand
– global image
– global player identification
• Problems with global brands
– Language
– brand acquisition
• Using the same brand name for locally acquired brands might hinder
sales
– country-of-origin
• Establishing image of a product originating in a specific country is
easier than others
– generic and near-generic names
• Companies don’t want their propriety brands to be used in generic
terms
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• Loss of trademark: Xerox, Kleenex
 DISTRIBUTION STRATEGIES
• Distribution
– the course – physical
path or legal title –
that goods take
between production
and consumption

16-15
DISTRIBUTION STRATEGIES
Distribution can vary
substantially among
countries
Attitude towards owning
a store
Costs of paying retail
workers
Delivery time spans

16-16
 DISTRIBUTION STRATEGIES
• When choosing distributors and channels firms must consider
– whether internal handling is feasible
• High volume, sufficient resources, global customer,
gaining competitive advantage
– which distributors are qualified
• Financial strength, good connections, Business
commitments, current status of personnel, facilities and
equipment
– after-sales service
• Establishing after sales service centers for complex
products
16-17
DISTRIBUTION STRATEGIES
• Distributors and retailers choose which products to handle
based on
– Storage facility, display space, personnel and other
expenses
• To get a distributor to work for them, companies may have
to
– give incentives
– use successful products as bait for new ones
– convince distributors that their product and company are
viable

16-18
 DISTRIBUTION STRATEGIES
• Factors that can contribute to distribution cost
differences among countries include
– Infrastructure conditions
• Roads and warehousing facilities
– The number of levels in the distribution
system
• More the distribution layers, higher the
prices are
– Retail inefficiencies
• Counter service vs self service

16-19
 DISTRIBUTION STRATEGIES
• E-commerce and the Internet
– Opportunities
• can replace traditional sales methods
• faster customer service
– Problems
• It cannot differentiate sales programs between countries.
Different appeals and prices in different countries yield
more sales.
• Still must comply with local laws of sales, marketing or
advertising which is difficult to accomplish with one single
web page.

16-20
 MANAGING THE MARKETING MIX
 Gap analysis
 a method for estimating a company’s potential sales by identifying
prospective customers it is not serving adequately
Usage
Less of the product is being used despite of population and
income availability
Product line
More variety can generate more sales of the same product line
Distribution
Not being offered in mainstream outlets
Competitive
Gap or opportunity to attract customers based on advertising,
marketing or increased sales efforts

16-21