unit 02. global marketing mix

Unit 02. Global Unit 02. Global Marketing Mix Marketing Mix

1.1. International product policy International product policy

2.2.Pricing credit terms of Pricing credit terms of businessbusiness

3.3.Distributional decisionsDistributional decisions

4.4.Promotional impact on Promotional impact on international marketing.international marketing.

Chapter 01Chapter 01

Exporting and Importing Exporting and Importing marketing and International marketing and International

MarketingMarketing

1International product

policy

MKT 4134 International Marketing

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What may sell abroad What may sell abroad The international marketer needs to determine what the market offering should be in a foreign market :•Defining the product offering•Products versus Services/RightsDefinition of a product: A product is anything that can be offered to a market for attention, acquisition, use or consumption, that might satisfy a want or need. Philip Kotler(1994)


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What may sell abroadWhat may sell abroadCompetition is changing globally and important writers have signalled this change in writing of the ‘new competition’.

Philip Kotler (1994) states:

The new competition is not between what companies produce in their factories but between what they add to their factory output in the form of packaging, services, advertising, customer service, financing, delivery arrangements, warehousing and other things that people value. (p.433)


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What may sell abroadWhat may sell abroad

Livingstone (1989) has pointed out, there are three important elements to consider in terms of production:1.The size of the market2.The level of local technology3.The local distribution of the factors of the production. Example: McDonalds, the US hamburger chain,

entry to the UK.

McDonalds Hamburger


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What may sell abroadWhat may sell abroadSegmentation could usefully be percervveid after conducting study of the enduring characteristics, such as target market geography, topography and demography.

International market segmentation according to Wind and Douglas (1972)

Firm Identify macroSegments of

country

X country segments

Customer segments

Y customersegments

Profile each countryOn enduring and Situation specific

characteristics

Customer segments Based on enduring and

Situation specific Characteristics

Devaluate on the Segmentation Criteria and specific firm constraints

Source: Wind., and Douglas,S.(1972) International market segmentation. European Journal of Marketing.


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Modification versus standardization- Modification versus standardization- the issuesthe issues

The rich industrial countries, which make up the membership of the Organization for Economic Cooperation and Development (OECD), account for 15% of the countries in the world, but 55% of the global GNP. Jain (1989) points to a few reasons as to why this then should lead to standardization.

The purchasing power of the OECD residents as expressed in discretionary per capita income is 8 to 15 times that of residents of the LDCs or NICs.

Television penetration within OECD countries exceeds 75%, whereas in NICs it is 25% and less than 10% in LDCs.

More than one-third of OECD consumers graduate from high school or higher educational institutions.


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Mandatory product modifications arise as a result of the following:

Legal requirements;Tariffs; ‘invisible’ tariffsNationalization- as response to lack of company presence on the market other than just in sales. Technical requirements- Regulation for such things as foodstuffs, drugs, electrical equipment are few examples. Taxation- for example with regard to cars; ‘road tax in UK’.Climate- special modifications for higher or lower working temperatures for machinery.

Product modification


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Other factors influencing modifications include:Consumer tastes. Consumers tastes will have an important bearing on the name used; product features, labeling, packaging and materials. KFC in Japan..Low personal disposable income. Literacy and low levels of education.Poor maintenance standards.Local labour costs.

Product modification

Tide; Product of Procter and Gamble


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Modification versus Modification versus standardization- the issuesstandardization- the issues

Product standardization – influencing factors.Production economies of scale; Production, R&D, MarketingDevelopment costs; escalating costs of new product development in the automobile industry or the aircraft industry. Stocks cost as a result of maintenance of wide range of products and high level of service.Components that are interchangeable across product models.Technological content. Example B to B MarketsConsumer mobility. Leads to familiarity with international products such as Coca-Cola, Pepsi, Bic razors or Gillette. Market homogeneity KFC’s Coke


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Modification versus Modification versus standardization- the issuesstandardization- the issues

Benefits of Standardization Cost savings through experience-curve effects and economies of scale.Consistency, with customers acknowledging consumer mobility and cross-border flows of television, radio, newspaper, and periodical ads.The remaining barriers are common to all markets, such barriers as social conventions regarding products use and purchasing patterns.


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Product standardization and World Product standardization and World Product MandatesProduct Mandates

Framework for determining marketing programme standardization

Target Market

Market Position

Nature of Product

Environment

Organization Factors

Degree of programmeStandardization

Performance in Programme markets

Source: Jain,S.C. (1989) Standardization of international Marketing strategy, Journal of Marketing.


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Organization factors1. Corporate orientation2. Headquarters-subsidiary

relationship3. Delegation of authority

Product standardization and World Product standardization and World Product MandatesProduct Mandates

Environmental factors 1. Physical environment2. Legal environment3. Political environment4. Marketing

infrastructure

Nature of product1. Type of product2. Product positioning

Market position1. Market

developments2. Market conditions 3. Competition

Target market1. Geographic area2. Economic factors

Framework for determining marketing programme

standardization

Source: Jain,S.C. (1989) Standardization of international Marketing strategy, Journal of Marketing.


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Branding Branding Branding is an important as a

means of distinguishing a company offering, and differentiating one particular product from its competitors.

Branding is a means by whereby the consumer can identify a particular product, and , if satisfied with it, ask it by name.The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers”.


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Branding….Branding….The objectives that a good brand

will achieve include:• Delivers the message

clearly • Confirms your credibility • Connects your target

prospects emotionally • Motivates the buyer • Concretes User Loyalty


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Branding….Branding….Branding is perceived as a means of guarantee

of quality offered by the manufacturer to the consumer.

There is the expectation of standardization, that each and every product will meet these expectations. Where there is a high degree of standardization accompanied by a high degree of customer satisfaction, the brand is likely to become the market leader.

Brand names fall into 3 categories (Fisher 1989);

1. Descriptive, like Corn Flakes and British Rail.2. Associative, like Fruit Bursts and InterCity.3. Stand-alone, like Hob-nobs or Casey Jones.


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Branding….. Branding….. Selecting a brand name:Good brand name should be able to

meet a number of criteria, such as being short, unique, memorable and able to connote an important quality or image.

It has to be available to use, registrable and protectable.

The name should describe the product, be distinctive, be pronounceable, lend itself to graphic display, be acceptable, be legal, be suggestive of the product that it represents, and be easy to remember.

Example: Coke and Pepsi are well-known

worldwide, even in markets where there is general scarcity.


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Branding: Types of brandingBranding: Types of branding

Types of Brands

Company name &Individual product

name

No-name, unbranded merchandise

Separate family names

Individual brandnames

Family brand names


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Branding problems…Branding problems…Brand names take account of good commercial sense- making use wherever possible. Problem arises when brand does not reflect the culture or language where the product is being sold.For example;

Sales of Tide in Denmark were low until it was deduced that it was the Danish word for menstrual flowFor example;

Shell used to have a slogan ‘I love Shell’ and they benefited greatly from French colloquial usage when they used their slogan in France ‘C’est celle que j’aime’, a phrase used to point out an attractive lady more than a motor oil, but the ‘celle’ and ‘Shell’ made it effective.


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Branding problems…Branding problems…The problem with names is that more and more are

being registered, making the search for a suitable name more difficult and creating a market for professional names search engine.

Namestormers (US company) follow a six-step approach:

1. Information gathering.2. Old-fashioned brainstorming.3. Individual name development.4. Feedback and evaluations.5. Limited trademark search and profanity check.6. Report preparation.


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Packaging Packaging Packaging can be described as a coordinated system of preparing goods for transport, warehousing, logistics, sale, and end use. Packaging contains, protects, preserves, transports, informs, and sells. It is fully integrated into government, business, institutional, industry, and personal use.Packaging and package labelling have several objectives:

Physical protectionBarrier protection Containment or agglomerationInformation transmission Marketing Security Convenience Portion control


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Intellectual property Intellectual property There are six main kinds of intellectual

property:

a. Patents, which are for innovators, i.e. new kinds of technology-3G

b. Copyright for literary, artistic, dramatic and musical works.

c. Trademarks which are words, symbols or pictures used to distinguish the goods or services of one person from those of another.

d. Industrial designs which are for the shape, pattern or ornamentation of an industrial object.

e. Plant breeders’ rights apply to certain new varieties.


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Brand name protection..Brand name protection..Brand piracy (product counterfeiting)Kaikati (1982) identified five different basic

ways of forging famous trademarks which have been developed:

1.Outright piracy2.Reverse engineering 3.Counterfeiting 4.Passing off5.Wholesale infringementBrand piracy or product counterfeiting is

becoming much more prevalent than ever before, and entering into more and higher value-added areas such as microcomputers.


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Brand name protection..Brand name protection..Five corporate strategies to handle counterfeiting

Kaikati (1981) has advanced the following counter-strategis form his research of counterfeiters and their victims.

1.Compete and attempt to overcome the opposition.

2.Avoid conflict and withdraw from the fray.

3.Accommodate the opposition, where the objective is

appeasement.

4.Collaborate.

5.compromise

unit 02. global marketing mix

Documents

international marketing

international products

international ldcs

international source

international need

product features

product models

global marketing