International marketing and strategy mix

8/14/2019 International marketing and strategy mix

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INTERNATIONALMARKETING AND STRATEGY

MIXGroup -6 Anjali Rawat (4)

Avinash D. (12)

Kiran Kumari (24)

Parag Rastogi (34)

Rajdeep Saikia (44)


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INTERNATIONAL MARKETING IS:

The Process of planning & conductingtransactions across the national borders to

create exchanges that satisfy the objectivesof individuals & organizations

Its form ranges from export-import trade, tolicensing, franchising, joint ventures, whollyowned subsidiaries & management contracts


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Basic principle of marketing strategy will stillapply, but their implementation, complexity& intensity may differ substantially.

Marketing strategy of Chinese good maydiffer in Pakistan & US.


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ROUTES OF ENTRY IN INTERNATIONALMARKETS

Licensing

Franchising

Joint ventures

Strategic alliances


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LICENSING

An agreement on which one firm permitsanother to use its intellectualproperty(patents, trademarks, copyrights,technology etc.) in exchange for

compensation, typically royalty. Benefits: does not require huge capital

investments or detailed involvement. No riskof expropriation. Eg. Chemists


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FRANCHISE:

Franchising is a form of licensing that grantswholesaler or retailer exclusive right to see aproduct or service in a specified area.

Eg. Dominos Pizza, Coffee Republic andMcDonald's Restaurants.


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JOINT VENTURE:

A collaboration of two or more organizationseach contributing assets, owns the subsidiary& share risk.

Eg. Mahindra and Renault, Bharti -walmart


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STRATEGIC ALLIANCE

SA are formal or informal arrangementsbetween two or more companies with commonbusiness objectives.

Pepsicos strategic alliance with Warner Brothers

International Theatre.( Warner Brothers is inpossession of 358 movie screens at 43 theatresin 6 countries: Great Britain , Germany,Portugal, Italy & Japan)

This was of strategic importance as half of theworld movie fans between 15 and 24 age groupwould visit the theatres to watch these movies


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ADJUSTING THE MARKETING MIX

3 ways:

1.Standardized approach to internationalmarketing in which product are marketedwith little or no modification.

2.Multidomestic Approach in which localcondition are adopted in each and everytarget market.

3.Globalization Approach to internationalmarketing in which differences areincorporated into regional or global strategythat will allow for differences inimplementation.


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INTERNATIONALMARKETING

Among different countries, why and how:

It makes sense to vary the attributes of

productsDistribution strategy may vary

Advertising and promotion strategies may

varyPricing strategy may vary


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GLOBALIZATION OF MARKETS? Levitts 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 oftheir mutual preferences

have contributed to creation of world brandshave caused market segments to emerge

across some national markets--inter-marketsegments


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MARKET SEGMENTATION

The process of identifying groups of consumers

whose purchasing behavior is unique in

important ways

Is based on demography, geography, social-cultural factors, psychological factors

Allows firms to adjust marketing mix to meet the

needs of separate market segments

Marketing mix variables: product-price-place

(distribution)-promotion


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MARKET SEGMENTATION ACROSSNATIONAL MARKETS

Standardization: companies may

Offer same products

Adjust balance of marketing mix to market

segments with similar needs across countries Adaptation: companies may

Offer different products

Adjust balance of marketing mix to market

segments with differing needs across countries


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MARKETING STRATEGY

Standardization (Global IntegrationPressures)

Efficiencies through integrated R&D,production, marketing

Advantages disadvantages

International uniformity Wholly undifferentiated

Reinforces positive consumer

perceptions

Trade barriers

Economies of scale What to standardize?

Quality is improved


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Adaptation (Local ResponsivenessPressures)

Buyer behavior (cultural, economicinfluence, brand perception--country oforigin idea)

Laws, regulations

Local environment needs

Responsiveness to local condition shifts


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Implications on marketing mix

Eg. Coca cola

Product and process- standardized

Distribution and promotion- adapted


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INTERNATIONAL MARKETING MIX:PRODUCT

Attributes need to be adapted to agreater or lesser extent to satisfy Consumer preferences/tastes due to

culture

Economic development levels affectconsumer behavior

National product/technical standards statemandated

Eg. Hamburger: meat type, taste, texture,sizeAutomobile: power, design, quality,

performance, comfort, size/capacity


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A-STAR

The company has high end interiors andcomfort features to fit into the lifestyles ofthe European customers and at the sametime provide a low cost car

CanonTook U.S. as benchmark neglecting Japan


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Optimal channel a company chooses to deliverthe product The most locally responsive element of

marketing mix because distribution channelsvary dramatically across countries

Retail system: concentrated-fragmentedChannel length: long, shortChannel exclusivity

INTERNATIONAL MARKETING MIX: PLACE


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INTERNATIONAL MARKETING MIX:PROMOTION

How firm communicates the productattributes / 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 hencechanged it strategy to serve the Mass Market.


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Suzuki- India Markets the same model of A-star car under the A Star Brand in India &Alto in Europe

Ford when launched Escort in differentmarkets in the world at some placespositioned and promoted as sports car andluxury car at different places.


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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 religiousbeliefs - cows are sacred to Hindus)

Similarly, no bacon in the middle east(pork isabolished by Islam)

Design, symbolism and aesthetics sometimesare important. Eg. look at Japanese cars fromthe front - they have a smiling face.


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Source effects (country of origineffects)like economic developments eg. Inremote regions of Africa there would be nomeans of electricity on which to run TVs or

radiosNestles 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)


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Standardized advertising strategypossible; standardized advertisingstrategy execution more difficult(culture, laws)

Eg. Local laws-it is not acceptable to shownaked legs in adverts displayed in Muslimcountries


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INTERNATIONAL MARKETING MIX:PROMOTION

Push v/s Pull strategiesPush strategy: personal selling

emphasis

Industrial products; complex new products Short distribution channels

Few print or electronic media


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Pull strategy: mass media advertisingemphasis Consumer goods Long distribution channels Marketing message may be carried via print /

electronic media


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OTHER CHOICES OF MEDIA

Web based- Chinese sites are full of symbolsand images

International tradeshows, trade missions

Sponsorship (international sporting events) Public relations (oil companies)


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INTERNATIONAL MARKETING MIX: PRICE

Price discrimination: demand elasticity

Influences on pricing for internationalmarketing.

oThe cost of manufacturing, distributing and marketing

oThe physical location of production plants

o Fluctuations in foreign currencies affect pricing

oThe price that the international consumer is willing topay

o Business objectives

oThe price that competitors in international markets arealready charging.


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Price discrimination strategy (to maximizeconsumer demand) eg. Direct pricediscrimination: Cola prices in Mexico Brazil andEastern 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. Thisapproach is used where a a substantialcompetitive advantage exists. luxuries such asCunard Cruises, Savoy Hotel rooms


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Economy Pricing- no frills low price. Thecost of marketing and manufacture are keptat a minimum. Supermarkets often haveeconomy brands for soups, spaghetti, etc.

Price Skimming- Charge a high pricebecause you have a substantial competitiveadvantage. Manufacturers of digital watchesused a skimming approach in the 1970s.

Premium pricing, penetration pricing,economy pricing, and price skimming are thefour main pricing policies/strategies. Theyform the bases for the exercise.


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OTHER STRATEGIES

Psychological Pricing- respond on anemotional, 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 airlineswill charge for optional extras such asguaranteeing a window seat or reserving a rowof seats next to each other.

Captive Product Pricing-For example a razormanufacturer will charge a low price and recoupits margin (and more) from the sale of the onlydesign of blades which fit the razor.


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Product Bundle Pricing-This also serves tomove old stock. Videos and CDs are oftensold using the bundle approach.

Promotional Pricing-BOGOF (Buy One Get

One Free). Value Pricing-This approach is used where

external factors such as recession orincreased competition force companies to

provide 'value' products and services toretain sales e.g. value meals at McDonalds.


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THANK YOU

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International marketing and strategy mix