chapter sixteen copyright, john wiley and sons, inc. chapter sixteen learning concepts – chapter...
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Learning Concepts – Chapter 16
1. Understand how to determine market potential of a foreign country.
2. Understand there are adaptations that are necessary for a product to sell in another country.
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Global Marketing and Supply Chain.
Global Marketing and Supply Chain.
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eLearning Concepts – Chapter 16 (cont)
3. Understand there can be domestic manufacturing influence, translating to product demand.
4. Understand that channel decisions are very important in international marketing.
Global Marketing and Supply Chain.
Global Marketing and Supply Chain.
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Copyright, John Wiley and Sons, Inc.
Marketing Domino’s Internationally
Domino’s opened its first foreign store (Winnipeg) in 1983. Japan was in 1984; United Kingdom was in 1985, Mexico was in 1989. It hit Taiwan in 1987, and Hong Kong in 1984. Per store sales volume in Asia is more than twice the United States. Their secret: product adaptation (corn and squid on pizza??), pricing determination, national promotion and advertising, and customized transportation (the scooter in Asia).
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The International Marketing Challenge
International markets offer vast opportunities for firms with a product or service in high demand. Newness, cultural adaptation, attractiveness, and appropriate marketing strategies can help tremendously.
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Assessing Market Potential
To assess market potential, firms seek to identify the aggregate demand for a product and estimate the costs associated with product introduction and distribution. Population growth provides a coarse estimate of future market potential. So do consumption patterns.
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Globalization and Localization in International Markets
Striking a balance between globalization and localization is a key challenge. Generally, the more closely defines the market segment, the less important are national stereotypes (Germans and ecology, Italians on performance). Across national markets, there is a trend toward greater similarity on product specifications, price, and packaging. On the other hand, cultural and national differences exist and require flexibility in communication with customers.
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Globalization Forces
Global Brands (Kellogg’s, McDonalds, Budweiser, Coke) are products that enjoy worldwide recognition and are relatively unaltered in terms of brand and appearance when sold abroad.
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Localization Forces
Localization forces represent pressures towards adjustment in product marketing or distribution to make it more appealing or to meet requirements particular to a foreign market.
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Product Adaptation
Faced with a foreign market with different characteristics, a firm may choose not to offer a product or a service in that market, to offer the same product it offers in other markets, or to adapt it to regional or country requirements. The Benefit/Cost approach and the User/Needs approach help determine whether adaptation is necessary.
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Product Adaptation
McDonald’s Product Adjustments: The Veggie Mac (Switzerland), Chicken Rice (Singapore), no pork (Saudi), McMacos and McFiesta (Paraguay), McKroket (Netherlands), Teriyaki McBurger (Japan), Curry Pie (Hong Kong), McRoyal (Germany), McCafe (Argentina), McCafe (Australia), McPalta (Chile). Hey, you deserve a break today!!
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Country-of-Origin Effect
This is the influence of the country of manufacturing image on the buying decision. The effect consists of innovativeness; design; and workmanship. There is strong evidence that country of origin influences buyer’s decisions.
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Branding
Branding is the process of creating and supporting positive perceptions associated with a product or service. Branding is especially complex in the international market. Some issues:
Selecting the right name Understand the local market Fine tune the size, price, value construct Quality/reliability at competitive price Holistic marketing using multiple channels
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Branding
Turning trademarks into “trustmarks” Establishing leadership brands, and changing
social habits Selecting allies and partners
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Channel Decisions
Export Intermediary choice is very important Direct Marketing is a potential channel Niche marketing is also very viable
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Promotion
It is important to choose the right mix marketing communications like advertising and direct marketing.
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Marketing Alliances
Marketing Alliances are frequently very important because they serve as partners in the marketing communications effort.