chapter 14 developing and marketing products. © prentice hall, 2008international business 4e...

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


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


CulturalCulturaldifferencesdifferences

CulturalCulturaldifferencesdifferences

Laws andLaws andregulationsregulationsLaws andLaws and

regulationsregulations

NationalNationalimageimage

NationalNationalimageimage

CounterfeitCounterfeitgoodsgoods

CounterfeitCounterfeitgoodsgoods

National Business National Business EnvironmentsEnvironments


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


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


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


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


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


Marketing CommunicationsMarketing Communications


Communication Strategy ICommunication Strategy I

Extend product and communications

Simple andSimple andprofitableprofitable

Simple andSimple andprofitableprofitable

GlobalGlobalconsumerconsumer

goodsgoods

GlobalGlobalconsumerconsumer

goodsgoodsLuxury itemsLuxury itemsLuxury itemsLuxury items


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


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


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


Communication Strategy VCommunication Strategy VCommunication Strategy VCommunication Strategy V

PurchasingPurchasingpowerpower

PurchasingPurchasingpowerpower

EconomicEconomicdevelopmentdevelopment

levellevel

EconomicEconomicdevelopmentdevelopment

levellevel

VaryingVaryinginfrastructureinfrastructure

VaryingVaryinginfrastructureinfrastructure

Product invention


Distribution StrategyDistribution Strategy

Planning, implementing, and controlling the physicalflow of a product from origin to consumption

Physical goods

Consulting services

News providers


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


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


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


Pricing StrategyPricing Strategy

Must match overall firm strategyMust match overall firm strategy

• Low-cost leadershipLow-cost leadership

• DifferentiationDifferentiation

• FocusFocus


Worldwide PricingWorldwide Pricing

Single selling price for all international markets

DifficultiesDifficulties

• Local production cost• Export, distribution cost• Local purchasing power• Exchange rates


Dual PricingDual Pricing

Different selling price abroad than at home• Price escalation

• Lower local price

Separate international from domestic buyers• If not, arbitrage possible


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


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

chapter 14 developing and marketing products. © prentice hall, 2008international business 4e...

Documents

international marketsbusiness

product namesbrand

costlyadapt product

local lawsbusiness

local needs

pullpowerful channel

distribution costlocal

key considerations