International business

Angela gomez

chapter17.pptx

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International Business

Sixteenth Edition

Chapter 17

Marketing Globally

Learning Objectives (1 of 2)

17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting

17-2 Discuss the pros and cons of adaptation versus global standardization of products

17-3 Describe pricing complexities when selling in foreign markets

Learning Objectives for the chapter.

Learning Objectives (2 of 2)

17-4 Recognize the advantages and problems of using uniform promotional marketing practices among countries

17-5 Explain the different branding strategies companies may employ internationally

17-6 Discern major practices and complications of international distribution

17-7 Illustrate how gap analysis can help in

managing the international marketing mix

Learning Objectives for the chapter.

Common Marketing Orientations

Objective 17-1

Production orientation

Sales orientation

Customer orientation

Strategic marketing orientation

Social marketing orientation

Learning Objective 1: Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting.

Five common marketing orientations can be applied around the world:

Production Orientation Rather than analyzing foreign consumer needs to a high degree, managers concentrate on production by assuming that customers simply want products with lower prices, higher quality, or whatever they sell domestically.

Sales Orientation In a sales orientation, a company sells abroad what it sells domestically by assuming that consumers are sufficiently similar.

Customer orientation What and how can the company sell in country A or to a particular type of consumer? In this case, the country or type of consumer is held constant and the product and marketing method vary. An MNE may most likely take this approach because the country’s size and growth potential or the consumer type is attractive.

Strategic Marketing Orientation Companies committed to continual rather than sporadic foreign sales usually adopt a strategy that combines production, sales, and customer orientations.

Social Marketing Orientation Companies with social marketing orientations pay close attention to the potential environmental, health, social, and work-related problems that may arise when selling or making their products.

Segmenting Global Markets

Objective 17-1

Global Segment

By Country

Mixing the Marketing Mix

Mass Markets

Learning Objective 1: Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting.

Segmenting Global Markets

Global Segment. An MNE may identify some global segments that transcend countries. Each country may have some people within the same segment, but the proportional and actual size of the segment will vary by country.

By Country. Let’s say a company decides to go to the Canadian market. It may modify its global segmentation to fit Canadian nuances, for example by including regional ethnic differences such as Quebec’s and British Columbia’s French and Chinese speakers, respectively.

Mixing the Marketing Mix. A company may hold one or more elements of its marketing functions—prices, promotion, branding, and distribution.

Mass Markets. Versus niche markets at the same time, most companies have multiple products and product variations that appeal to different segments; thus, they must decide which to introduce abroad and whether to target them to mass markets or niche segments.

Country Adaptation vs. Global Standardization

Objective 17-2

Why Adapt?

Legal considerations

Cultural considerations

Economic considerations

Learning Objective 2: Discuss the pros and cons of adaptation versus global standardization of products.

Why adapt products to a specific country or region?

Legal considerations such as labeling requirement differences and/or environmental protection regulations,

Cultural considerations Religious differences obviously limit the standardization of product offerings globally, such as the limitation of pork product sales by food franchises in Islamic countries.

Economic considerations might include things like income level and income distribution, and infrastructure.

Potential Issues in Pricing

Objective 17-3

Government intervention

Market Diversity

Export Price Escalation

Fluctuations in Currency

Fixed versus Variable pricing

Learning Objective 3: Describe pricing complexities when selling in foreign markets.

.Government Intervention Every country has laws that affect the prices of goods. Minimum prices are usually set to prevent companies from eliminating competitors and gaining monopoly positions. Maximum prices are usually set so that poor consumers can buy products and services.

Market Diversity Country-to-country variations in demand and competition create natural segments and limitations in pricing possibilities. In terms of culture, a seafood company would sell few sea urchins or tuna eyeballs in the United States at any price, but it can export them to Japan at a high price, where they are considered delicacies.

Export Price Escalation If standard markups occur within distribution channels, lengthening the channels or adding expenses somewhere in the system will further raise the price to the consumer—a situation known as export price escalation.

Fluctuations in Currency Value For companies accustomed to operating with one relatively stable currency, pricing in highly volatile currencies can be extremely troublesome.

Fixed Versus Variable Pricing MNEs often negotiate their export prices with importers. Small firms, especially those from developing countries, frequently give price concessions too quickly, limiting their ability to negotiate on a range of marketing factors that affect their costs:

Push-Pull Promotion Decisions

Objective 17-4

Push and Pull Definition

Factors in Push-Pull Decisions

Learning Objective 4: Recognize the advantages and problems of using uniform promotional marketing practices among countries.

The Push–Pull Mix Promotion may be push, which uses direct selling techniques, or pull, which relies on mass media.

Factors in Push–Pull Decisions.

Type of distribution system.

Cost and availability of media to reach target markets

Consumer attitudes toward sources of information.

Price of the product compared to incomes.

Standardize Advertising?

Objective 17-4

Advantages of standardizing Advertising

Considerations when standardizing

Learning Objective 4: Recognize the advantages and problems of using uniform promotional marketing practices among countries.

Advantages of standardized advertising include:

Some cost savings.

Better quality at the country level.

A common image globally.

Rapid entry into different countries.

Translation Selling in a country with a different language necessitates translation unless the advertiser tries to communicate an aura of foreignness.

Legality The legality of advertisements varies mainly because of diverse national views on consumer and competitive protection, civil rights promotion, standards of morality and behavior, and nationalism.

Message Needs An advertising theme may not be appropriate everywhere because of country differences in consumers’ product awareness and perception, the people who make the purchasing decision, and what appeals are most important.

Global Branding

Objective 17-5

What is a brand?

Global Brands

Considerations

Learning Objective 5: Explain the different branding strategies companies may employ internationally.

A brand is an identifying mark for products or services.

Some companies, such as Apple, use the same brand and logo for most of their products around the world. This helps develop a global image, especially for customers who travel internationally.

Considerations for using a global brand

Language A brand name may carry a different association in another language.

Country-of-Origin Images Consumers have limited knowledge of the nationality of most brands, and they often misclassify the production origins.

Locational Origin of Names One ongoing international legal debate concerns product names associated with location. The EU protects the names of many European products based on location names, such as Roquefort and Feta cheeses, Parma ham, and Chianti wine.70 It has also pushed for protection against the foreign use of regulated names associated with wines, such as clos, chateau, tawny, noble, ruby, and vintage

Generic and Near-Generic Names Companies want their brands to become household words, but not so much that they become generic, a situation whereby competitors can use the names to call their products. In the United States, the brand names Xerox and Kleenex are nearly synonymous with copiers and facial tissue, but they have nevertheless remained proprietary brands.

Working with Product Distribution

Objective 17-6

Internalization of distribution?

Factors to determining a internalization strategy

Distribution partnerships as an option

Learning Objective 6: Discern major practices and complications of international distribution.

Should companies handle their own distribution? Some considerations:

Sales Volume and Cost When sales volume is low, a company usually must rely on external distributors to be more economical. As sales grow, it may handle some distribution itself to gain more control.

Circumstances conducive to internalization include not only high sales volume but also the following factors:

When a product has the characteristic of high price, high technology, or the need for complex after-sales servicing (such as aircraft), the company will probably have to deal directly with the buyer, but may simultaneously use a distributor to identify sales leads.

When the company deals with global customers, especially business-to-business (such as an auto-parts manufacturer selling original equipment to the same automakers in multiple countries), sales may go directly to the global customer.

When the company’s main competitive advantage is its distribution methods, it may control distribution abroad, such as Avon’s direct selling through independent representatives.

Distribution Partnerships

Companies who choose to use distributors:

May need to give incentives.

may use successful products as bait for new ones.

must convince distributors that product and company are viable.

What is GAP analysis?

Objective 17-7

Definition of GAP analysis

Types of GAPS

Learning Objective 7: Illustrate how gap analysis can help in managing the international marketing mix.

Gap analysis, whereby a company estimates potential sales for a given type of product and compares how emphasis on different marketing mix elements can better help it serve prospective customers.

The difference between total market potential and a company’s sales is due to several types of gaps:

Usage—collectively, all competitors sell less than the market potential.

Product line—the company lacks some product variations

Distribution—the company misses coverage by geography or type of outlet.

Competitive—competitors’ sales are not explained by product-line and distribution gaps.

GAP Analysis Process

Objective 17-7

Figure 17.3 Gap Analysis

Learning Objective 7: Illustrate how gap analysis can help in managing the international marketing mix.

This figure illustrates the process of GAP analysis.