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Chapter 14 - 1International Business 4e© Prentice Hall, 2008
Chapter 14 Chapter 14 Developing and Developing and
Marketing Marketing ProductsProducts
© Prentice Hall, 2008 International Business 4e Chapter 14 - 2
Chapter PreviewChapter Preview
• Explain the key considerations in choosing
international product strategies
• Identify the five international communication
strategies
• Describe each element that impacts international
distribution strategies
• Identify various international pricing strategies
and the factors that influence selection
© Prentice Hall, 2008 International Business 4e Chapter 14 - 3
Globalization and MarketingGlobalization and Marketing
Standardized productand promotion
Adapted productand/or marketing
• Consistent image and message
• Contain costs
• Consistent image and message
• Contain costs
• Respond well to local needs
• Obey local laws
• Respond well to local needs
• Obey local laws
© Prentice Hall, 2008 International Business 4e Chapter 14 - 4
CulturalCulturaldifferencesdifferences
CulturalCulturaldifferencesdifferences
Laws andLaws andregulationsregulationsLaws andLaws and
regulationsregulations
NationalNationalimageimage
NationalNationalimageimage
CounterfeitCounterfeitgoodsgoods
CounterfeitCounterfeitgoodsgoods
National Business National Business EnvironmentsEnvironments
© Prentice Hall, 2008 International Business 4e Chapter 14 - 5
Brand and Product NamesBrand and Product Names
Brand nameBrand name
Competitive advantage Consistent image Consider connotation
Product nameProduct name
Select carefully Respect cultures Obey local laws
© Prentice Hall, 2008 International Business 4e Chapter 14 - 6
Product Life CyclesProduct Life Cycles
New-product development effortsNew-product development efforts Result is shorter product life cycles
New-product development effortsNew-product development efforts Result is shorter product life cycles
Consecutive market introductionsConsecutive market introductions Technology and travel make obsolete
Consecutive market introductionsConsecutive market introductions Technology and travel make obsolete
© Prentice Hall, 2008 International Business 4e Chapter 14 - 7
Push and Pull StrategiesPush and Pull Strategies
Push Strategy Pull Strategy
Pressure channel members to carry aproduct and promote it to final users
Create buyer demand that will encourage channel members to stock a product
© Prentice Hall, 2008 International Business 4e Chapter 14 - 8
Choosing Push or PullChoosing Push or Pull
Powerful channel members make push difficult
Fewer media outlets in emergingmarkets makes pull difficult
Brand loyalty makes pull easier
© Prentice Hall, 2008 International Business 4e Chapter 14 - 9
Global Sales Force Global Sales Force ManagementManagement
Research localResearch localcustomer basecustomer base
Obtain feedbackObtain feedbackfrom salespeoplefrom salespeople
Adapt to localAdapt to localcompensationcompensation
Adjust to localAdjust to localmotivation tacticsmotivation tactics
© Prentice Hall, 2008 International Business 4e Chapter 14 - 10
Marketing CommunicationsMarketing Communications
© Prentice Hall, 2008 International Business 4e Chapter 14 - 11
Communication Strategy ICommunication Strategy I
Extend product and communications
Simple andSimple andprofitableprofitable
Simple andSimple andprofitableprofitable
GlobalGlobalconsumerconsumer
goodsgoods
GlobalGlobalconsumerconsumer
goodsgoodsLuxury itemsLuxury itemsLuxury itemsLuxury items
© Prentice Hall, 2008 International Business 4e Chapter 14 - 12
Communication Strategy IICommunication Strategy II
Extend product / adapt communications
SatisfiesSatisfiesdifferent needdifferent need
SatisfiesSatisfiesdifferent needdifferent need
Appeals toAppeals todifferent buyerdifferent buyer
Appeals toAppeals todifferent buyerdifferent buyer
ServesServesdifferent functiondifferent function
ServesServesdifferent functiondifferent function
© Prentice Hall, 2008 International Business 4e Chapter 14 - 13
Communication Strategy IIICommunication Strategy IIICommunication Strategy IIICommunication Strategy III
LocalLocalinfrastructureinfrastructure
LocalLocalinfrastructureinfrastructure
LocalLocalcontent lawscontent laws
LocalLocalcontent lawscontent laws Can be costlyCan be costlyCan be costlyCan be costly
Adapt product / extend communications
© Prentice Hall, 2008 International Business 4e Chapter 14 - 14
Communication Strategy IVCommunication Strategy IVCommunication Strategy IVCommunication Strategy IV
RatherRatheruncommonuncommon
RatherRatheruncommonuncommon
Can beCan beexpensiveexpensive
Can beCan beexpensiveexpensive
Requires largeRequires largeprofitableprofitablesegmentsegment
Requires largeRequires largeprofitableprofitablesegmentsegment
Adapt product and communications
© Prentice Hall, 2008 International Business 4e Chapter 14 - 15
Communication Strategy VCommunication Strategy VCommunication Strategy VCommunication Strategy V
PurchasingPurchasingpowerpower
PurchasingPurchasingpowerpower
EconomicEconomicdevelopmentdevelopment
levellevel
EconomicEconomicdevelopmentdevelopment
levellevel
VaryingVaryinginfrastructureinfrastructure
VaryingVaryinginfrastructureinfrastructure
Product invention
© Prentice Hall, 2008 International Business 4e Chapter 14 - 16
Distribution StrategyDistribution Strategy
Planning, implementing, and controlling the physicalflow of a product from origin to consumption
Physical goods
Consulting services
News providers
© Prentice Hall, 2008 International Business 4e Chapter 14 - 17
Distribution ChannelsDistribution Channels
Cost implicationsCost implicationsCost implicationsCost implications
Number ofNumber ofintermediariesintermediaries
Number ofNumber ofintermediariesintermediaries
Channel lengthChannel lengthChannel lengthChannel length
Intensive channelIntensive channel• Many resellersMany resellers
Intensive channelIntensive channel• Many resellersMany resellers
Exclusive channelExclusive channel• One / few resellersOne / few resellers
Exclusive channelExclusive channel• One / few resellersOne / few resellers
Degree of exposureDegree of exposureDegree of exposureDegree of exposure
© Prentice Hall, 2008 International Business 4e Chapter 14 - 18
Product CharacteristicsProduct Characteristics
ValueValuedensitydensityValueValue
densitydensity
Product’s value relativeto its weight and volumeProduct’s value relativeto its weight and volume
The lower a product’s valuedensity, the more localizedis its distribution system
The lower a product’s valuedensity, the more localizedis its distribution system
© Prentice Hall, 2008 International Business 4e Chapter 14 - 19
Distribution ProblemsDistribution Problems
Financial lossFinancial loss Financial lossFinancial loss
Strategic impactStrategic impact Strategic impactStrategic impact
Lack of marketLack of market understandingunderstanding
Lack of marketLack of market understandingunderstanding
Theft andTheft and corruptioncorruption
Theft andTheft and corruptioncorruption
© Prentice Hall, 2008 International Business 4e Chapter 14 - 20
Pricing StrategyPricing Strategy
Must match overall firm strategyMust match overall firm strategy
• Low-cost leadershipLow-cost leadership
• DifferentiationDifferentiation
• FocusFocus
© Prentice Hall, 2008 International Business 4e Chapter 14 - 21
Worldwide PricingWorldwide Pricing
Single selling price for all international markets
DifficultiesDifficulties
• Local production cost• Export, distribution cost• Local purchasing power• Exchange rates
© Prentice Hall, 2008 International Business 4e Chapter 14 - 22
Dual PricingDual Pricing
Different selling price abroad than at home• Price escalation
• Lower local price
Separate international from domestic buyers• If not, arbitrage possible
© Prentice Hall, 2008 International Business 4e Chapter 14 - 23
Pricing IssuesPricing Issues
Intra-company transferIntra-company transfer
Free-market priceFree-market price
Upper or lower limitsUpper or lower limits
Unfairly-low export priceUnfairly-low export price
Transfer priceTransfer price
Arm’s length priceArm’s length price
Price controlsPrice controls
DumpingDumping
© Prentice Hall, 2008 International Business 4e Chapter 14 - 24
Chapter ReviewChapter Review
• Explain the key considerations in choosing
international product strategies
• Identify the five international communication
strategies
• Describe each element that impacts international
distribution strategies
• Identify various international pricing strategies
and the factors that influence selection
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