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Launching a new product / brand in the European / International Markets

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  • Launching a new product / brand in the

    European / International Markets

  • How to introduce a new product / brand

    in the European or international markets?

    International marketing plans

    Analyze the market (define market potential)

    Segment the market and identify the right segment

    (segmentation and positioning)

    Evaluate the attractiveness of the segment (quantitative

    and qualitative evaluation)

    Developing the marketing mix

    Case discussion

  • Case discussions

    Accor

    Barilla

    Dunkin Donuts

    Twix

    De Longhi

    and many others

  • Marketing Plan for international

    marketing

  • Selling is only the tip of the iceberg

    There will always be need for

    some selling. But the aim of marketing

    is to make selling superfluous. The aim

    of marketing is to know and understand

    the customer so well that the product or

    service fits him and sells itself. Ideally,

    marketing should result in a customer

    who is ready to buy. All that should be

    needed is to make the product or

    service available.

    Peter Drucker

  • The 7Ps of the marketing mix

  • MARKETING PLAN PRODUCT / MARKET / YEARS

    EXTERNAL ANALYSIS

    INTERNAL ANALYSIS

    MARKETING STRATEGY MARKETING MIX

    Demand Market System

    CompetitorsSegmentation

    Macro environmentBuying Behavior

    Operational Processes

    EconomicsMarketing

    Threats

    WeaknessesStrenghts

    Opportunities

    OBJECTIVES

    TARGET GROUP

    COMPETITIVE

    STRATEGY

    POSITIONING

    PRODUCT /

    SERVICE

    PRICE

    PLACE

    PROMOTION

    CONTROL

  • The marketing budget

    Gross sales value: p x q

    - Trade Allowances

    = Net product sales

    - Direct delivered costs (production, distribution, etc.)

    = Gross Profit

    - Marketing appropriations

    - Marketing research costs

    - Communication costs

    = Profit Before Indirects (PBI)

    Top line objectives

    (efficacy)

    Bottom line objectives

    (efficiency)

  • Which are the differences in the marketing plan of...

    An exporting company?

    A multinational company?

    A global company?

  • EXPORT MARKETING PLAN PRODUCT / MARKET / YEARS

    EXTERNAL ANALYSIS

    INTERNAL ANALYSIS

    MARKETING STRATEGY MARKETING MIX

    Demand Market System

    CompetitorsInternational

    Segmentation

    Macro environmentBuying Behavior

    Operational Processes

    EconomicsMarketing

    Threats

    WeaknessesStrenghts

    Opportunities

    OBJECTIVES

    TARGET GROUP

    COMPETITIVE

    STRATEGY

    POSITIONING

    PRODUCT /

    SERVICE

    Standardization/

    Adaptation

    PRICE

    Standardization

    / Adaptation

    PLACE

    Standardization

    / Adaptation

    PROMOTION

    Standardization

    / Adaptation

    CONTROL

    ENTRY MODE

  • MULTINATIONAL MARKETING PLAN PRODUCT / MARKET / YEARS

    EXTERNAL ANALYSIS

    INTERNAL ANALYSIS

    MARKETING STRATEGY MARKETING MIX

    Demand Market System

    CompetitorsSegmentation

    Macro environmentBuying Behavior

    Operational Processes

    EconomicsMarketing

    Threats

    WeaknessesStrenghts

    Opportunities

    OBJECTIVES

    TARGET GROUP

    COMPETITIVE

    STRATEGY

    POSITIONING

    PRODUCT /

    SERVICE

    PRICE

    PLACE

    PROMOTION

    CONTROL

  • GLOBAL MARKETING PLAN PRODUCT / MARKET / YEARS

    EXTERNAL ANALYSIS

    INTERNAL ANALYSIS

    MARKETING STRATEGY MARKETING MIX

    Demand Market System

    CompetitorsGlobal

    Segmentation

    Macro environmentBuying Behavior

    Operational Processes

    EconomicsMarketing

    Threats

    WeaknessesStrenghts

    Opportunities

    OBJECTIVES

    TARGET GROUP

    (Horizontal segment)

    COMPETITIVE

    STRATEGY

    GLOBAL POSITIONING

    GLOBAL

    PRODUCT /

    SERVICE

    GLOBAL

    PRICE

    GLOBAL

    PLACE

    GLOBAL

    PROMOTION

    CONTROL

    Adaptation? Adaptation?

    Adaptation? Adaptation?

  • Market Potential, Segmentation and

    Targeting

  • The identification of the target countries can be developed through the market attractiveness / competitive strenght matrix

    Choice of target markets / countries

    Attractiveness of the market

    Com

    peti

    tive p

    osi

    tion H

    igh

    Mediu

    mLow

    High Medium Low

    Not interesting Not interesting

    Not interesting

    Monitoring

    Monitoring

    MonitoringInvest

    Invest

    Invest

    5 3 1

    3

    1

    (Grow)

    (Grow)

    (Grow)

    / Selectivity strategies

    / Selectivity strategies

    / Selectivity strategies

  • Socio - Demographic segmentation

    Behavioral segmentation

    Psychographic segmentation

    Benefit segmentation

    Micro market segmentation (step 5)

    Segm

    enta

    tion

    based o

    n d

    em

    and

    Segm

    enta

    tion b

    y

    pro

    duct

    gro

    up Traditional format

    Creative specialities

    Regional specialities

    An example:

    Individuals

    (BtoC)

    Companies

    (BtoB)

    Channels of distribution

  • Figure 8.4 Segmentation for selling salty snacks in the workplace

    Source: Adapted from Barron, J. and Hollingshead, J. (2002) Market segmentation work: successful marketing really does begin with effective

    segmentation, Marketing Management, JanuaryFebruary: 248. Reproduced with permission from J. Barron, J. Hollingshead and the Monitor Group

  • With horizontal segmentation similar segments in

    different countries are aggregated in a unique cluster

    Horizontal (intermarket / transnational ) segmentation

    is possible when psychografic or benefit segmentation

    have been applied in the segmentation of the single

    markets

    Different weight of country segments within the

    horizontal cluster

    Horizontal segmentation

  • An example of horizontal segmentation

    Segment 1

    Segment 2

    Segment 3

    Country A

    Country B

    Country C

    Country D

    Country E

    Horizontal

    Segment 1

    Horizontal

    Segment 2

    Horizontal

    Segment 3

  • What is positioning?

    Positioning is the act of designing the companys offering and image to occupy a distinctive

    place in the mind of the target market.

  • Positioning statement

    To (target & group need)

    Our (Brand)

    Is (the concept)

    That (what the POD is or does)

  • Positioning criterias

    Benefit / Attributes / Price

    Usage situation

    Product use

    Users

    Against competitors

    Product Class

    Companys image

    Hybrid positioning

  • Segmentation and positioning: the Accor case

    http://www.accor.com/gb/groupe/activites/hotellerie/activites_hotellerie.asp?flash=N

    http://www.accor.com/gb/groupe/activites/hotellerie/activites_hotellerie.asp?flash=Nhttp://www.accor.com/gb/groupe/activites/hotellerie/activites_hotellerie.asp?flash=N

  • Accor brands: value propositions

    Sofitel : French-style luxury

    Lenotre: creator of upscale gourmet dining

    Groupe Lucien Barrire: a mayor player in the luxury leisure segment

    Pullman: Customized solutions for business travelers

    Novotel : resolutely contemporary hotels

    Mercure: a Mercure for every traveler

    Suitehotel: an oasis for todays nomads

    Accor Thalassa: the best of seawater theraphy and hot spring spas

    Ibis: the leader in the European economy segment

    All Seasons: Hotel that have all you need

    Novotel : resolutely contemporary hotels

    Etap Hotel: hotels for everyone

    Formule 1: the benchmark in low cost hotels

    Motel 6: affordable & friendly (we will leave the light on for you)

    Studio 6: Long stay hotels (extend your stay, not your budget)

    Adagio City Aparthotel : a new network of urban residences (a home away from home)

    La Compagnie des Wagons-Lits: a leader in onboard catering and services

  • Understanding competitive structure of a market

    How do customers view the brand?

    Which competitive brands do customers perceive to be their closest competitors?

    What market offering and company attributes are most responsible for these perceived differences?

  • The Barilla Case

    Barilla Video

    In the time of entry, was the positioning strategy different in different countries?

    Today, do you consider Barilla a global brand?

  • Dunkin Donuts

    Who is the enemy?

  • Product Decisions

  • The international

    product mix

  • Many decisions depend on the stage of

    the Product Life Cycle

    Source: Kotler et al (2009), MM

  • PLCs of different countriesfor a specific product

    Source: Hollensen, 2007, p.431

  • The PLC of disposable nappies in China

    Expo Shanghai, June 2010

    kaidangku

  • The PLC of the Nivea Brand

    across different countries

  • Foreign Countries Italy

    Product Life Cycle and advertising across different countries

  • The three levels of a product

    functional features, performance,perceived value, image,

    technology

    Delivery, installation, guarantees, after-sales service,

    spare parts

    brand, quality, design, packaging, price,country of origin, staff behaviour, size

    Core productbenefits

    Productattributes

    Support services

    Ability to standardize product elements

    Low

    High

  • The trade - off between standardization and adaptation

  • Product and Service Decisions

    Individual Product

    Product Line

    Product Mix

    Key Decisions:

  • Individual Product Decisions

    See Cateora & Graham Chapter 10

  • Ito En has launched in Japan a new vegetable based drink. This vegetable concentrated juice

    blend, rich in beta-carotene and lycopene, can supply the equivalent of 350g of vegetables

    with a 280g bottle, with no added sugar or salt. This product contains 25 different vegetables:

    carrots, tomatoes, sweet potato, red bell peppers, green kidney beans, moroheiya, celery,

    broccoli, kale, pumpkin, lettuce, green bell peppers, asparagus, Chinese cabbage, sweet potato

    stalk and leaf, green peas, mustard spinach, angelica, parsley, cress, cabbage, radish, spinach,

    Japanese wild chervil.

    There are lots of similar products like this being launched across Japan and the Asia-Pacific.

    Even if this product has a huge amount of vegetables and it is undoubtedly healthy, it is

    improbable that it would be popular in Europe or the US.

  • Differences in packaging: the Twix caseFra

    nce a

    nd

  • ...Italy

    1. Where are the differences?

    2. Why?

  • ()Best global brands (Interbrand, 2010)

  • Branding decisions

    Source: Source: adapted from Onkvisit and Shaw, 1993, p. 534.

    Remember COO (Country of Origin effect) as an attribute of brandreputation!

  • Advantages:

    better profit margins

    brand loyalty

    better bargaining power

    better control of distribution

    Manufacturers brand

    Disadvantages:

    Requires brand promotion

    difficult for small manufacturer with unknown brands

  • Advantages:

    Possibility of larger

    market share

    no promotional problems

    possibility to increase export business with increasing internationalization of the big retail chains

    Private brands

    Disadvantages:

    Severe price competition, because the retail chain can always switch supplier

    Lack of market identity

    If the manufacturer is producing both its own brands and private brands, there can be the risk of cannibalization of his brand

  • Advantages:

    Highly profitable business

    Fast brand diffusion all over the world

    Licensed brand

    Disadvantages:

    Risk to lose control over its product

    A company can license names and symbols created by

    other manufacturers, names of well-known celebrities,

    characters from popular movies and goods

  • Harry Potter pancakes:

    a licencing mistakeHarry Potter Lego:

    a licencing success

  • Co-branding between Martini and Dolce e Gabbana:

    MARTINI GOLD by

    DOLCE&GABBANA is the result of a

    long term affair between two Italian

    icons MARTINI GOLD and

    DOLCE&GABBANA.

    Source: http://www.martinigold.com/it-

    it/the-movie/advertising-gallery.aspx

  • Ingredient branding between Dell and Intel:

  • Brand Strategy

    Line Extension Existing brand names extended to new forms, sizes,

    colors and flavors of an existing product category. Related also to package sizes. Ex: Dannon Yogurt Flavors

    Brand Extension Existing brand names extended to new or modified

    product categories. Ex: Red Bull Energy Drink, Red Bull Cola

    Multibrands New brand names introduced in the same product

    category. Ex: Helena Rubistein, Lancome, Kerastase, Biotherm.

    New Brands New brand names in new product categories.

    Ex: Sanson (by acquisition of Barilla Group)

  • Advantages:

    Maximum market efficiency

    Reduction of adv costs

    Elimination of brand confusion

    Good for culture-free products

    Good for prestigious products

    Easy identification around the world

    Uniform world-wide image

    Global brand

    Disadvantages:

    Assumes market homogeneity

    Possibility of negative connotation

    Requires quality and quantity consistency

    Legal complications

    Local managers opposition and resentments

  • Advantages:

    Meaningful names

    Local identification

    Allows variations of quality and quantity across markets

    better control of distribution

    Local brand

    Disadvantages:

    Higher marketing costs

    Higher inventory costs

    Loss of economies of scale

    Diffused image

  • The Carlsberg Group: Russian Brand Portfolio in 2007

  • Global productsIs it Coca Cola a global product and brand?

  • Global products

    Is it Unilever icecream a global product and brand?

    http://www.langnese.de/index.htmlhttp://www.icecreamusa.com/good_humor/index.html

  • Distribution Decisions

  • Consumer marketing channels

    Figure 17.11 Consumer and industrial marketing channels

  • Industrial marketing channels

    Figure 17.11 Consumer and industrial marketing channels (continued)

  • Differences in the distribution system, logistics

    and transport infrastructure

    External decisions concerning channel structure

    1

    Inefficient logistic system use of local intermediaries price escalation

    Alternative distribution channels: examples of OTC and beerIn France pharmacies and drugstores distribute 65.7% of the total OTC national

    market value and supermarkets and hypermarkets account for only 8.3%; in markets

    such as US supermarkets and hypermarkets account for 28.8% and pharamacies

    and drugstores distribute 49.1% of the US OTC pharmaceuticals.

    Channels Brazil India Singapore Germany Russia

    Specialist Retailers 48.60% 56.60% 6.80% 7.30% 30.20%

    Supermarkets/ hypermarkets 29.70% 0.20% 17.80% 61.30% 48.10%

    On-trade 14.90% 43.10% 63.80% 22.90% 8.80%

    Other 6.80%

  • Legal regulations/ local business practices

    External decisions concerning channel structure

    1

    In China companies such as Mary Kay, Amway and Avon in 1998 were

    included in the ban of pyramid selling. After losing 50% of sales, these

    companies had to adapt to new regulations which imposed their sales

    people also to pass an exam by local authorities.

    2.

    Product life cycle3.

    Size of the market and distribution of consumers

    across the country4.

    Procter & Gamble (P&G) distribution network in rural China

  • Purchasing and shopping habits - outlet preferences

    1

    Retail formats in Vietnam : one decade after introduction of supermarkets, only 10% of all the products are distributed through modern distribution while the rest 90%

    continue to be sold through traditional channels such as:

    Organized bazaars: approved by the authorities, crowded, chaotic, colorful, but also dirty and without product standards nor trademarks)

    Informal bazaars (called Cho Coc), not approved by local Vietnamese government which planned (unsuccessfully) to eliminate them. The retailer is a street

    vendor that can be stationary or may move from place to place, typically selling

    vegetables, eggs, meat, fish, ecc.

    Mom & pop stores: small family owned shops selling consumer stuff such as food, drinks, toys, personal care products, etc.: in some streets, in a few hundred

    meters, there can be 200 500 similar mom & pop stores

    5.

    External decisions concerning channel structure

  • Competitors

    Successful distribution strategies

    Exclusive contracts with retailers and wholesalers

    Sisheido example:

    high-quality counseling and services tailored to the requests of each

    consumer, and constantly meeting customer needs for skincare and makeup.

    The direct control of the distribution channel

    5.

    Sources:

    http://www.shiseido.co.jp/e/ir/acc/ir_e0804acc/i

    mg/brf_08041.pdf;

    http://www.shiseido.co.jp/e/ir/annual/index.htm

    External decisions concerning channel structure

    http://www.shiseido.co.jp/e/ir/acc/ir_e0804acc/img/brf_08041.pdfhttp://www.shiseido.co.jp/e/ir/acc/ir_e0804acc/img/brf_08041.pdf

  • Internal decisions concerning channel structure

    Intensive, selective or exclusive strategy?

    Relationship with intermediaries should be differentiated because complex products require extensive information exchange and interaction catering to solve functional problems: product delivery, installation and/or after-sale service, etc. In some cases also top management is involved

    How many export managers? Which are their international experiences? Whichare their marketing capacities? Budget? Owned sales network or indepententintermediaries?

    Entry mode and degree of control

    Distribution strategy and penetration objectives

    Product complexity

    Internal organization of the export department

  • Intensive, selective or exclusive strategy? Some examples

    Intensive strategy

    Michelin Group took an intensive strategy when it entered Russia with its Michelin Truck Pro and Tyre Plus partnerships. Michelin already had 82 existing branches in 61 towns when it decided to extend its sales network in 2006 to every Russian town of 150,000 residents or more in order to provide proper coverage in this vast country.

    Fast moving goods manufactured by large multinational companies which aim to penetrate with their brands all the segments of the population.

    M = Manufacturer

    W= Wholesaler

    R = Retailer

  • Intensive, selective or exclusive strategy? Some examples

    Selective strategy

    Armani Group, in the apparel sector, which distribute its high quality products not only through directly owned stores (exclusive approach) but also penetrating some countries through the selection of the finest wear stores in the main cities.

    M = Manufacturer

    W= Wholesaler

    R = Retailer

  • Intensive, selective or exclusive strategy? Some examples

    Exclusive strategy

    Zara, the brand of the Spanish Inditex Group. Zara penetrates foreign countries solely through directly owned stores where only the companys brand is sold.

    M = Manufacturer

    W= Wholesaler

    R = Retailer

  • Managing international distribution channels

    Direct and indirect distribution channels

    Conventional versus vertical marketing systems

    Multichannel strategies

  • Conventional marketing system

    Manufacturer

    Wholesaler

    Retailer

    Consumer

  • Vertical marketing system

    16-

    75

  • Types of vertical marketing system

    16-

    76

    Corporate VMS A vertical marketing system that combines successive stages of

    production and distribution under single ownership (examples

    are DOS directly owned stores).

    Contractual VMS A vertical marketing system in which independent firms at

    different levels of production and distribution join together

    through contracts to obtain more economies or sales impact

    than they could achieve alone (examples are wholesaler-

    sponsored voluntary chains, retailer cooperatives or franchise)

    Administrative

    VMS

    A vertical marketing system that coordinates successive stages

    of production and distribution, not through common ownership

    or contractual ties but through the size and power of one of the

    parties.

  • Multichannel distribution

    Companies usually define multiple channels (direct and indirect) and choose the more suitable channel organization (conventional or vertical) often proposing differentiated offers and/or brands.

    Distribution channels in lOreal:

    25 brands in 130 countries

  • Multichannel distribution

    http://www.careernomics.com/Loreal0709/can/excelling.php

    + Lancome e-shop

  • Functions performed by intermediaries

    1

    16-79

    Carrying of inventory

    Demand generation

    Physical distribution

    After-sales service

    Credit extension to customers

  • Types of channel intermediaries

    Agents: Agents sell supplier-owned products primarily to retailers and other wholesalers, not taking title to goods but acting in name of the company they represent

    Wholesalers: Wholesalers sell goods supplied by other firms to retailers and/or directly to industrial, commercial and other end users. They are distinguished from other types of intermediaries in that they actually take title to the goods they sell.

    Retailers:

  • Criteria for evaluation foreign distributors

    Source: Cavusgil, Yeoh and Mitri (1995)

  • Grocery Retailing: the European Mosaic

  • Selling to Retailers

    Manufacturers have to take into consideration the variety of retail intermediaries that can be used in the foreign markets.

    Manufacturers can create partnerships with retailers

    In some cases they have to develop owned stores and/or franchising networks which are more suitable to promote and sell their brands.

  • Selling to Retailers: some examples

    For example, Bulgari's retail network consists of 264 exclusive Bulgari stores: 107 are DOS (directly owned stores), 44 are franchised stores and 56 are travel retail and wholesale stores). Bulgari also distributes through independent watch retailers and through the finest and selected perfumeries and department stores.

  • Selling to Retailers: some examples

  • Pricing considerations

    Companies set prices according to 4 sets of

    factors:

    costs

    consumer perception

    competitors prices

    societal consideration.

  • Competitors prices

    The strenght of local competitors an example:

    Arvind Mills, an Indian company that makes denim jeans

    for Lee, Wrangler, Arrow and Tommy Hilfiger - brands

    which sell for pound 30 or more in the West. This local

    company is also the owner of the biggest selling Indian

    jeans brand Ruf and Tuf, which sell its products at just

    pound 3 via tailors in the form of a complete "sew it

    yourself" kit.[1]

    [1] The bottom of the pyramid is where the real gold is hidden, Marketing

    Week. London: Feb 8, 2007. pg. 18,

    http://proquest.umi.com.ezproxy.lib.ucf.edu/pqdweb?index=3&sid=6&src

    hmode=1&... 16/08/2008

  • Consumer perception: the de Longhi case

    de Longhi in Europe and USA

    Price positioning

    Advertising (see Video)

    1. Is price positioning the same in different European countries?

    2. Is this situation the result of companys marketing strategies or is it determined by consumer perception?

    3. What is the role of recent advertising campaigns in the European market? And in USA

  • Consumers needs: the Nokia case

    de Longhi in Europe and USA

    Price positioning

    Advertising (see Video)

    1. Is price positioning the same in different European countries?

    2. Is this situation the result of companys marketing strategies or is it determined by consumer perception?

    3. What is the role of recent advertising campaigns in the European market? And in USA

  • Contesto socio- economico e politiche di marketing

    Nigeria - Nokia 1200

    - Multi phonebooks, for multiple users

    - Flashlight, to be used when there is a power failure

    - Call tracker, to set the time limit of a call

    - SMS languages not only in English but also in

    Hausa, Igbo, Yoruba, ecc.

    14

  • Creating

    value for

    consumers

  • Setting prices in an international context: the problem of price escalation

  • Tactics for

    countering price escalation

    Rationalizing the distribution process

    Lowering the export price from the factory

    Establishing local production of the product

    Pressurizing channel members to accept

    lower profit margins

  • Price and the internet

    Comparison Shopping for Plasma TV Made Easy with Historic Pricing Charts.

    Source: http://www.nextag.com/LG-42PC5D-42-High-540181875/price-history-html

    --- Maximum

    --- Median

    --- Minimum

    --- Maximum

    --- Median

    --- Minimum

  • Objectives, strategies and pricing policies

    There are a number of strategic alternatives or approaches to setting

    international prices:

    cost versus market based approach

    new product pricing: skimming versus penetration pricing

    standardization versus adaptation approach

  • Pricing for new products with innovative features and benefits:

    Market skimming pricing Pricing strategy used for new products that have unique

    features and benefits over the competition.

    A high price is set for the new product to skim the maximum

    price and generate the most profit.

    Market penetration pricing Initial low price to penetrate the market and convert as many

    buyers onto the new product and grab a large market share.

    This is a short-term strategy that is dangerous and needs to be

    supported by a robust range of products to leverage against.

  • Different countries: same price (standardization) or not (differentiation)?

  • Price dumping

    Dumping is defined as selling products in other countries markets below cost or

    below domestic prices, with the objective of obtaining relevant market shares in

    the foreign countries.

    However, dumping is controlled by many rules developed both at national (to

    hedge local companies against dumping) and international levels. Since the

    creation of the WTO in 1995 anti-dumping activities have been strongly

    reduced.

    Nevertheless anti-dumping investigations are still numerous, with China being

    the biggest target

  • Price dumping: some examples

    Global Anti-dumping initiations from 1980 to 2007 (first half)

    Source:

    http://www.antidumpingpublishing.com/uploaded/documents/CSDocuments/GTP%202007

    %20(update%20Oct%202007).pdf

  • Price dumping: some examples

    Main targets of anti-dumping initiations from 1995 to 2006

    Source:

    http://www.antidumpingpublishing.com/uploaded/documents/CSDocuments/GTP%202007

    %20(update%20Oct%202007).pdf

    Target Investigations (n) Target Investigations (n)

    China, P.R. 536 Germany 78

    Korea, Rep. of 229 Malaysia 72

    United States 175 EU 63

    Chinese Taipei 173 Ukraine 59

    Japan 135 South Africa 54

    Indonesia 130 Italy 44

    India 127 Spain 42

    Thailand 120 Singapore 41

    Russia 101 UK 41

    Brazil 92 Mexico 39

    http://www.antidumpingpublishing.com/uploaded/documents/CSDocuments/GTP 2007 (update Oct 2007).pdfhttp://www.antidumpingpublishing.com/uploaded/documents/CSDocuments/GTP 2007 (update Oct 2007).pdf

  • Gray marketing / parallel imports

    A parallel import occurs when:

    - channel members located in low price markets, not under the strict control of the

    manufacturer, resell its products to market areas for significantly higher prices.

    -In another type of gray marketing, a company manufactures a product in its home-

    country market as well as in foreign markets.

    In this scenario, products manufactured by the companys foreign affiliate for sales

    abroad are sold by foreign distributors to gray marketers, who bring the products

    into the producing companys home-country market to compete with the

    domestically produced goods.

    - In both cases, the marketing opportunity that presents itself requires gray market

    goods to be priced lower than goods sold by authorized distributors or

    domestically produced goods.

  • Transfer pricing

    Transfer pricing is the price set and paid for products

    shipped between units of the same organization.

    The unit can be a division, a foreign subsidiary or a joint

    venture. Not only will these prices determine duties and

    taxes that are relevant for customs and tax authorities, but

    also will they affect the profitability of the divisions

    involved in intra-corporate exchange.

    The latter is particularly critical when the foreign unit is an

    intermediary, whose financial performance strongly

    depends on transfer price levels.

  • Countertrade

    A $ 9 billion barter deal

    The Democratic Republic of Congo is trading with the China Railway

    Engineering Corporation, a Chinese state-owned company. The objective

    is to plan a new road which will be the first endeavor of the biggest single

    deal Chinas ever done in Africa, worth $9 billion.

    DR Congo will benefit from $6 billion of desperately needed infrastructure

    about 2,400 miles of road, 2,000 miles of railway, 32 hospitals, 145

    health centers, and two universities. In return, China will receive precious

    natural resources to feed its booming industries 10 million tons of

    copper and 400,000 tons of cobalt.

    Source: Barter News, $9 Billion Barter Deal, 04/19/2008, retrieved on December 4th from

    http://www.barternews.com/9_billion_dollar_barter_deal.htm

  • Countertrade

    Countertrade is an umbrella term which encompasses the

    trading/exchange of goods or services without using

    currency.

    A variety of trading practices are included, from the simple

    exchange of goods for goods at an agreed value (barter) to

    more complex export transactions.

  • Promotion and Advertising

  • Setting the promotion mix

  • Toyota

    Suggested marketing:

    MR2 Sports Car

    Translation in French: M-R-deuxsounded like merde

    Mercedes Benz

    Pre-launch marketing: The Vision GST (Grand Sports Tourer) concept

    for a minivan

    In Canada: GST is associated with the highly unpopular Goods and

    Services Tax