international marketing mix decisions
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Svend Hollensen
GLOBAL MARKETING4th Edition
International marketing mix decisions
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Hollensen, Global Marketing 4e, © Pearson Education 2008 14-2
Figure 1 Environmental factors influencingthe balance between standardization
and adaptation
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Hollensen, Global Marketing 4e, © Pearson Education 2008 14-3
Figure 2 Standardization and adaptationof the international marketing mix
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Hollensen, Global Marketing 4e, © Pearson Education 2008 14-4
Figure 14.1 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
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Hollensen, Global Marketing 4e, © Pearson Education 2008 14-5
Figure 14.3 The product life cycle
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Hollensen, Global Marketing 4e, © Pearson Education 2008 14-6
Figure 14.7 PLCs of different countries for a specific product
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Hollensen, Global Marketing 4e, © Pearson Education 2008 14-7
Figure 14.11 Product/ communication mode
Promotion
Product
Standard
Adapt
NewAdaptStandard
Straight extension
Promotionadaptation
Productadaptation
Dualadaptation
Productinvention
Source: Source: adapted from Keegan, 1995.
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Hollensen, Global Marketing 4e, © Pearson Education 2008 14-8
Kellogg’s dual adaption for Indian market
http://www.kelloggcompany.com
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Hollensen, Global Marketing 4e, © Pearson Education 2008 14-9
Orgasmic Chocolates stimulate more than the
sense of taste
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Hollensen, Global Marketing 4e, © Pearson Education 2008 14-10
Omega utilizes celebrity branding
www.omegawatches.com
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Hollensen, Global Marketing 4e, © Pearson Education 2008 15-11
Figure 15.1 International pricing framework
Firm-level factorsEnvironmental
factors
Product factors Market factors
Firm performance
Other elements
Pricing strategies
Terms
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Hollensen, Global Marketing 4e, © Pearson Education 2008 15-12
Internal factors affecting international pricing decisions
Firm-level factorsCorporate and
marketing objectivesCompetitive strategyFirm positioningProduct developmentProduction locationMarket entry modes
Product factorsStage in PLCPlace in product lineMost important
product featuresProduct positioningProduct cost structure
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Hollensen, Global Marketing 4e, © Pearson Education 2008 15-13
External factors affecting international pricing decisions
Environmental factors Government influences
and constraints Inflation Currency fluctuations Business cycle stage
Market factorsCustomers’ perceptionsCustomers’ ability to payNature of competitionCompetitors’ objectives,
strategies, strengths and weaknesses
Grey market appeal
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Hollensen, Global Marketing 4e, © Pearson Education 2008 15-14
Gillette relies on product line pricing
www.gillette.com/
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Hollensen, Global Marketing 4e, © Pearson Education 2008 15-15
Basic approaches to pricing across countries
Price standardization
Price differentiation
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Hollensen, Global Marketing 4e, © Pearson Education 2008 15-16
Figure 15.5 Structural factors of standardized
versus differentiated pricing
Source: Reprinted from European Management Journal, Vol. 12, No. 2, Diller. H. and Bukhari, I. (1994) ‘Pricing conditions in the European Common Market’, p. 168, Copyright 1994, with permission from Elsevier.
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Hollensen, Global Marketing 4e, © Pearson Education 2008 16-17
Figure 16.2a Japanese car parts distribution channels
Sources: Cateora (1993); Onkvisit and Shaw (1993); Pirog and Lancioni (1997).
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Hollensen, Global Marketing 4e, © Pearson Education 2008 16-18
Figure 16.2b US car parts distribution channels
Sources: Cateora (1993); Onkvisit and Shaw (1993); Pirog and Lancioni (1997).
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Hollensen, Global Marketing 4e, © Pearson Education 2008 16-19
Figure 16.5 Factors influencing channel width
Source: adapted from Lewison, 1996, p. 279.
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Hollensen, Global Marketing 4e, © Pearson Education 2008 16-20
Figure 16.7 Criteria for evaluating foreign distributors
Overall qualifications/ selection criteria
Financial and company
strengths
Productfactors
Marketingskills
Commitment
Facilitating factors
Source: Adapted from Cavusgil et al. (1995).
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Hollensen, Global Marketing 4e, © Pearson Education 2008 17-21
Cathay Pacific chose standardized advertising
throughout its markets
http://www.cathaypacific.com
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Hollensen, Global Marketing 4e, © Pearson Education 2008 17-22
Courvoisier cognac used a localization strategy
http://www.courvoisier.com/