International Marketing

MKT303 International Marketing

Product management and surviving in an international market Workshop 11

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What will we be learning? Week Topic

1 Introduction to International Marketing

2 Political and economic factors impacting international marketing

3 Social and technological factors impacting international marketing

4 Legal and environmental factors impacting international marketing

5 Assignment presentations

6 Study week (Attendance is compulsory).

7 Trade relations

8 Culture and communications

9 Market entry – an international marketing approach

10 Getting a product to the customer – international context

11 Product management and surviving in an international market

12 Future of international marketing and ethics

Learning Outcomes 1. Analyse the components of a product or

service. 2. Understand the concepts of product

management. 3. Assess the product lifecycle and understand

how this varies for international markets 4. Explore the role of branding in international

markets. 5. Comprehend the new product development

process.

Why am I learning this?

Adoption of products does not occur uniformly across the world. Different markets

have differing rates of adoption.

These factors affect potential competition, market demand and promotional strategies

and is required by any marketer

Workshop Activity

Revision

What did we discuss last week? Identify the three main points that you’ve learned during

last week’s class.

Share your thoughts with the rest of the class.

This Topic’s Big Idea

“You’ve got to start with the customer experience and work back toward the

technology”

Steve Jobs

What is a Product? • Core product: The

problem-solving core benefits that consumers are really buying when they obtain a product

• Tangible (Actual) product: A product’s parts, styling, brand name and packaging that combine to deliver the core produced benefits

• Augmented product: Additional customer services and benefits that are built around the core and actual products and support these offerings Source: Marketing Insider

Product Life Cycle • Market entry and

promotional strategy depend on the product life cycle – Introductory: tends to have

less competition, Need to build need recognition

– Growth: Competition increases, aim to build market share and grow with the market

– Maturity: Need to gain market share from competitors

– Decline: Consider new opportunities or innovations

Remember that not all products will have a uniform lifecycle –

For example: smartphones are a mature market in Australia, but growing in India.

Workshop Activity • Consider the size of the

market and its rate of growth – is it growing faster than economic growth rates?

• Is the level of competition increasing?

• Consider the following markets – what stage are they? How could a company compete?

Market: $100 million

Market: $154 million

Economic growth: 5%

Market growth: 3.3%

Market: $150 million

Economic growth: 5%

Market growth: 50%

Product Adaption and Standardisation

• Adaption – change the product to meet the cultural, social, political and economic norms within a country

• Standardisation – offer the same product in all countries.

Same Product

Adapted Product

Same Promotion Straight Extension

Product Adaption Product

development New

Promotion

Adapted Promotion

Promotion Adaptation

Dual Adaptation

Straight Extension • Straight extension –

Here the same product and promotion is extended to foreign countries.

• Many luxury brands and products fall into this category: bit.ly/mkt303luxury

• Electronics are also products that can be marketed this way. Source: Louis Vuitton Instagram

Workshop Activity

In a group find two brands that have taken the straight extension approach to

international marketing.

Discuss your findings with the class.

Product Adaption • Product is adapted to

meet the needs of the country.

• Promotion follows similar base to promotion across different countries.

• McDonalds, Dominos and Dunkin Donuts are examples of brands that have adapted this strategy.

Source: McDonalds

Promotion Adaption Cont.

• Product remains the same, however the promotion is changed to meet the needs of the market.

• Factors considered are socio-cultural norms, value system and also media types and availability.

Dual Adaption

• The product and the promotions are adapted to the country.

• The US chips brand Lays is called Thins in Australia

• Often has Australian only flavours that are sold in Australia.

Source: Thins

Workshop Activity

Discuss the strengths and weaknesses of the dual approach. What kind of businesses

do you think would adopt this?

Discuss your findings with the class.

New Product Development/Promotion

• An entirely new product is developed for different markets and promotion is also new for this product

• Bottom of pyramid products often fall into this category

• Microcredit is an example in developing countries to provide lending opportunities

A product bundle from Johnson and Johnson offered in Ghana

Modifying Products for International Markets

Reasons for product modification: Competitive Reasons

Legal Reasons

Linguistic Reasons

Fiscal Reasons Economic Reasons

Cultural Reasons

Political Reasons

Activity: Are there any other reasons for product modification?

Discuss why these reasons are factors.

The Process of Developing a New Product

Source: Kozak and Smyczek, 2015

Developing Products for International Markets

When considering the implications for developing products for international markets, a few factors may impact on the product design:

Technical skills Labour costs Literacy

Income Interest rates Maintenance

Climate Isolation Different standards

Packaging • Functions of packaging in foreign

markets is similar to domestic markets: – Product identification and branding – Maintaining consumer

characteristics of goods; – Conveying information

• The main factors to consider when creating and using packaging in foreign markets are:

1. Compliance with the requirements of consumer pack size of individual countries;

2. Availability with respect to local custom packaging design;

3. Existing legal requirements in the package;

4. Feasibility of establishing the conditions under which goods will be recognisable to its potential buyers;

Labelling • Labelling laws varies from

country to country • Prices are required to be printed

on the labels in India, • In Chile it is illegal to put prices

on labels or in any way suggest retail prices.

• Coca-Cola ran into a legal problem in Brazil with its Diet Coke.

• Brazilian law interprets ‘diet’ to have medicinal qualities. Under the law, producers must give daily-recommended consumption on the labels of all medicines.

• Coke had to get special approval to get around this restriction.

Workshop Activity

In groups of three to four watch the video: bit.ly/mkt303cosmetics

Discuss: what should Australian cosmetics brands be aware of when entering Hong Kong?

How does this differ to Australia?

Branding • Brand is an important strategic resource of a company

operating in conditions of internationalisation and globalisation of economy.

• For companies operating on the international market, branding of their products can be more complicated than a domestic market.

• Need to consider using a locally created brand or maintain consistency with a global brand.

Source: Górska-Warsewicz and Pałaszewska-Reindl, 2002

Branding Cont. A company operating on the international market and using its own brand may consider four kinds of activities. 1. Using one brand on all markets (global brand or multinational

brand), 2. Using one brand modified for individual markets (global brand

portfolio) 3. Using the company’s name or a single brand as an umbrella brand

under which brands of individual products appear (umbrella brand strategy)

4. Using various local brands on different markets (portfolio of local brands).

Source: Wiktor, Oczkowska and Żbikowska, 2008

Workshop Activity

Read this article: https://www.theatlantic.com/business/archiv

e/2015/04/setting-the-symbolic-golden- arches-aflame/390708/

Should McDonald’s not brand itself as a western company?

Country of Origin Effects • Country of origin (COO) effect

can be defined as any influence that the country of manufacture has on a consumer’s perception of a product.

• Country of origin may have positive or negative affect.

• Some countries have good reputations and others have bad reputations for certain products.

• Countries are also stereotyped on the basis of whether they are industrialised or developing.

Activity 1: What are the reputable COOs for the following products?

Activity 2: What are the Australia’s reputable product categories?

Next Week

Future of international marketing and marketing ethics.