unit 7-pricing n promotion 4 intl mkts
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8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts
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I n t e r n a t i o n a l M a r k e t i n gI n t e r n a t i o n a l M a r k e t i n g
Unit 7
Pricing and
Promotion for International Markets
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Environmental Influences on PricingDecisions
Environmental Influences on PricingDecisions
� Currency Fluctuations
± Are price adjustments appropriate?
± Distributors
± Weak Local currency� Exchange Rate Clauses
� Pricing in an Inflationary Environment
± FIFO, LIFO
� Government controls and Subsidies
± Deposits, profits, subsidies
� Competitive Behavior
� Price and Quality Relationships
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Grey Market GoodsGrey Market Goods
� Trademarked products that are exported from onecountry to another, where they are sold by unauthorizedpersons or organizations
� Parallel importing
± French Champagne in U.S.
± Pharmaceutical products in EU
± Caterpillar's U.S. dealers
� Quality and other services
� Laws
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Transfer PricingTransfer Pricing
� Transactions between buyers and sellers that havesame corporate parent
� There are three major alternative approaches to transfer pricing which varies with the nature of the firm, products,markets and historical circumstances
± Cost-based transfer pricing
Cost plus pricing
± Market-based transfer pricing
Current or planned volume levels Market size
± Negotiated prices
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Global Pricing ± Policy AlternativesGlobal Pricing ± Policy Alternatives
� Extension/Ethnocentric
� Adaptation/Polycentric
± Pharmaceutical products
� Invention/Geocentric ± Include local costs, income levels, competition and local marketing
strategy
Local cost-plus (short run and long run)
Product line pricing
Estimate market size
Consumer products (local income level)
Fit the marketing mix
± Push and pull strategy
± Head quarter's price coordination
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Global Advertising and BrandingGlobal Advertising and Branding
� Advertising is a sponsored paid message placed in a massmedium
� First mover advantage
� Consumer and industrial products
� Global Market segmentation
� Benefits of Global Brands
Global Advertising Content
� Communication (wrong media, lack of cultural knowledge,understandability, noise )
± Global or localized
± Pepsi in Japan; McDonald¶s in Japan and Pakistan
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Selecting an Advertising AgencySelecting an Advertising Agency
� Advertising agencies
± Inhouse Ad
Benetton, Disel
± Outside agency
Local or global
± Combine both
Cocacola
� Issues
± Company organization
± National Responsiveness
± Area coverage
± Buyer perception
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Public Relations and PublicityPublic Relations and Publicity
� Non-paid form of communication
� Includes news releases, newsletters, press conferences,tours of plants and other company facilities, articles intrade or professional journals, company publications andbrochures, TV and Radio talk, special events andhomepages on internet
� Eg
± Death of Diana
� PR staffs or PR firms
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Public Relations and PublicityPublic Relations and Publicity
� Growing role of PR in Global Marketing Communications
± Create trust and harmony, articulate and influence public opinion,
anticipate conflicts and resolve disputes
± Good relations between companies and government
± Language of the host country ± Sensitive to non-verbal communications
� PR practices differ around the world
± Industrialized countries
U.S.: news in small local newspaper
Europe: the perspective has not been widely accepted
± Ghana: dance, songs, and story telling
± India: press releases won¶t be so effective
± Ethnocentric and polycentric approach
± Intel
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Personal SellingPersonal Selling
� Two-way personal communication
� Selling industrial products in Global Markets
± Selling Process
Prospecting, preapproaching, approaching, presenting,problem solving, handling objections, closing the sale and
following up
± Persistence
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Sales PromotionSales Promotion
� Refers to consumer or trade program of limited durationthat adds tangible value to a product or brand
� Sales promotion and Trade promotion
� Sales promotion laws and usage vary around the world
� U.S., EU
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Sponsorship PromotionSponsorship Promotion
� Can be used to increase awareness and esteem, to buildthe brand identification to enhance brand¶s positioningand sales, and to circumvent advertising restrictions insome countries
� Olympics, world cup
� In U.S., Clairol professional Care Products supports AIDS research while Avon supports breast cancer research
�