Global Marketing

1. Global Marketing 11 chapter

2. Standardization for Global Markets Elements of the marketing mix - product, price, place, and distribution - may need to be standardized in order to ease production and introduction into new markets. • There are three basic options to determine whether, and to what extent, modifications need to be made to the marketing mix: • Standardization approach: policy of making no or minimal changes to the marketing mix for the global marketplace. • Multidomestic approach: policy of adapting the marketing mix to suit each country entered • Globalization approach: creation of a regionally or globally similar marketing mix strategy.

3. Standardization versus Adaptation Factors Encouraging Standardization Economies in product R&D Economies of scale in production Economies in marketing Control of marketing programs “Shrinking” of the world marketplace Factors Encouraging Adaptation Differing use conditions Government and regulatory influences Differing buyer behavior patterns Local initiative and motivation in implementation Adherence to the marketing concept

4. Product Policy Regional, Country, or Local Characteristics Product Characteristics Company Considerations Decisions to Alter Domestic Product Local behavior, tastes, attitudes, and traditions affect product decisions made by marketers of consumer products.

5. Product Positioning The perception by consumers of a firm’s product in relation to competitor’s products.

6. Product Policy Product characteristics and consumer benefit may dictate a need to standardize or adapt products for the international promotion -ingredients, packaging and labels, brand names, and service requirements may need changed according to the country of promotion. Company considerations Company policy - “Is it worth it?” - may determine a need for product adaptation. Product Line Management – consist of local, regional, and global brands. Companies concentrate on the most profitable products which vary dramatically from market to market. Product Counterfeiting

7. Pricing Policy International pricing is complicated by government influence, different currencies, and additional costs. Export Pricing Foreign Market Pricing Price Coordination Transfer (Intracompany) Pricing International Pricing

8. Export Pricing

9. Foreign Market and Transfer Pricing Foreign market pricing requires price discrimination by firms conducting business in multiple countries, it is determined by: corporate objectives, costs, customer behavior and market conditions, market structure and environmental constrains. Foreign market price gaps have led to gray marketing (the marketing of authentic, legally trademarked goods through unauthorized channels). Transfer pricing is the pricing of products as sold by a firm to its own subsidiaries and affiliates. Taxes, import duties, inflationary tendencies, unstable governments, and other regulations must be considered to establish transfer pricing. Price coordinationhave increased after the introduction of the euro in the twelve members of the European Union. (Same or vey similar price among a group of countries).

10. Distribution Strategies Distribution Channels provide the essential links that connect producers and customers. Channel design refers to the length and width of the distribution channel

11. 11 C’s of Channel Design 1.Customers(Demographic and Psychographic) 2. Culture (The distribution culture of a market) 3. Competitors (Channels utilized by the competition) 4. Company objectives (Management goals may conflict the channel) 5. Character (Influences channel length & design) 6. Capital (Company’s financial strength) 7. Cost (Expenditures incurred in maintaining it) 8. Coverage (Area & quality of representation) 9. Control (Potential loss of ctr. by using intermediaries) 10. Continuity (Short/long term relationship with distributors & product improvement) 11. Communication (Helps convey the marketer’s goals to the distributors & solve conflicts)

12. Distribution Policy Intermediaries are chosen after the channel design has been determined. Open communication is required for a channel relationship to work well. Below is a framework for managing a channel relationship. TABLE 11.2 Managing Relations with Overseas Distributors

13. E-commerce in Distribution Internet spending continues to increase despite the continuation of a global recession. Firms can select digital intermediaries to help them enter the e-commerce arena. • Once a firm enters into e-commerce it must: • be prepared to offer 24-hour order taking and customer service • have regulatory and customs-handling expertise to deliver international purchases • have an in-depth understanding of marketing environments for further future developments

14. Promotional Policy A combination of the various promotional strategies will create the product and firm’s image among the intended target market. Media Strategy is applied to the selection of media vehicles and the development of a media schedule. Media spending varies dramatically around the world; the U.S. spends the most, over $163 billion in 2007 followed by China at $77 billion. The top spenders include General Motors, Procter & Gamble, AOL/Time Warner, Daimler/Chrysler, and Philip Morris.

15. Promotional Policy Creative Strategy is the development of the content of a promotional message such as an advertisement, publicity release, sales promotion activity or Web-based promotion. Personal selling describes the marketing efforts focusing on one-to-one efforts with customers. Sales promotion involves such activities as coupons, sampling, premiums, consumer education and demonstration activities, cents-off packages, point-of-purchase materials, and direct mail. Public relations is the marketing communication function charged with executing programs to earn public understanding and acceptance