Selected issues on international marketing programme

1. Selected issues on international marketing programme

2. Focused on Product and Services • The opportunities for international marketers of consumer goods and services today have never been greater • New consumers are springing up in many emerging markets, which promise to be huge markets in the future • In the more mature markets consumers´ tastes become more sophisticated and complex due to increase in purchasing power • The difference between tangible products and services • The difference between business-to-consurmer and business-to-business markets

3. Product policy: Analyzing Product Components • A product is multidimensional, and the sum of all its features determines the bundle of satisfaction (utilities) received by the customer • The many dimensions of products can be divided into three distinct components: • Core components • Packaging components • Support services components • These components include all a product´s tanglible and intangible elements and provide the bundle of utilities the market receives from use of the product.

4. Which products for international markets? • The same as for home market • Adapted products • Standardized products • New products Define the reasons for each option!

5. Four degrees of adaptation: combinations: product and promotion Non- customization Adapting the message Adapting the portfolio Custom product design Fully leverage global product and marketing Customize Marketing message and language Customize mix of product and services based on local needs Create market specific products and services

6. Branding for international markets • Branding dimensions: • Global brands • Regional brands • Local brands • Producer´s brand • Private brands • Brand partnership • Brand portfolio

7. International product life cycle

8. The international product life cycle • Macroeconomic approach: • Typically, demand first grows in the innovating country. Production, consequently, takes place first in the innovating country. As the product matures and technology is diffused production occurs in other industrialised countries and then is less developed countries. • Microeconomic approach: • Due to different economic levels in different countries, a specific product can be in different PLC stages in different countries.

9. International pricing strategies • Cost-plus. • Strategic pricing: penetration pricing, skimming (including strategies for pricing a new product) • Experience curve pricing • Demand-based pricing • Pricing across products (product line pricing) • Total package price • Psychological pricing. In comparison to domestic pricing strategies, the decisions are much more complex, because they are affected by a number of additional external factors, such as fluctuations in exchange rates, accelerating inflation in certain countries and the use of alternative payment methods such as leasing and barter for instance.

10. Influences on international pricing Overall corporate strategy Consumer characteristics Desired brand position Government price controls Supply costs Responsiveness of sales to price changes Selling points of the product Price Nature of local competition Local credit periods Rate of market growth Stability of exchange rates Distributors’ markups Consumer response to promotional activities Local inflation rates

11. Factorsaffecting the price setting in international marketing External factors??? • Environmental factors • Market factors • Firm-level factors • Product factors Internal factors???

12. What to add to general pricing strategies? • Pricing across countries: • Standardization: internationalization of competition, homogenization of competitive structures, international activities of large retailers • Differentiation: differences in price segments, strengths of local competitors, retailer power, consumer preferences

13. International pricing taxanomy • Global price leader: global market leader, market and cost-oriented global prices, global competition but local differences • Global price follower ..... • Multilocal price setter • Local price follower

14. European pricing strategies Lowest price 20 % in price differences Future European price corridor Highest price

15. Reasons for lowering prices in foreignmarkets • Lower consumer incomes. • Intense local competition. • R&D costs have already been covered. • Weak demand for the product. • Reasons for increasing prices in foreign markets ????

16. Price escalation • Price escalation affects all firms involved in cross-border transportation. • Due to additional shipping or other kinds of transportation, insurance, tarrifs and distribution charges, the exported product costs more in the export market than at home.

17. Distribution policy • Entry mode • Physical distribution • INCOTERMS • Distribution channels

18. Distribution decision Channel decisions – external factors • Customer characteristics • Nature of product • Nature of demand (location) • Competition • Legal regulations/local business practice Channel decisions – internal factors • Decisions concerning structure of the channel • Managing and controlling distribution channels • Managing logistics

19. Considerations in transport and distribution policy • Cost vs. speed. • Nature of the product (weight, perishability, dimensions). • Customer preferences. • Value of the goods. • Intermediate handling and storage charges. • Working capital tied up in goods in transit.

21. International distribution channel

22. Objectives of international advertising • Increasing sales. • Attracting new customers. • Altering customer behaviour. • Communicating brand values.

23. The case for standardization • Consumer characteristics are becoming homogeneous across borders. • Urbanization is increasing. • Internationalization of media has led to converging lifestyle choices.

24. The case for customization • Cultural differences between markets. • Language differences. • Differences in educational backgrounds. • Non-availability of some media. • Different attitudes towards advertising. • Legal requirements in different markets.

25. Advantages of using a local agency • Gives the foreign firm a local image. • Closer links between agency and media. • More commitment to the market. • Local flair and creativity.

26. Objectives of international advertising • Increasing sales. • Attracting new customers. • Altering customer behaviour. • Communicating brand values.

27. The case for standardization • Consumer characteristics are becoming homogeneous across borders. • Urbanization is increasing. • Internationalization of media has led to converging lifestyle choices.

28. The case for customization • Cultural differences between markets. • Language differences. • Differences in educational backgrounds. • Non-availability of some media. • Different attitudes towards advertising. • Legal requirements in different markets.

29. International media planning problems • Differing definitions of terms such as circulation and readership. • Differing segmentation of media. • Large number of possible media to screen. • Absence of reliable information on ‘pass-alongs’ of magazines.

30. Advantages of using a local agency • Gives the foreign firm a local image. • Closer links between agency and media. • More commitment to the market. • Local knowledge and creativity.

31. International media planning problems • Differing definitions of terms such as circulation and readership. • Differing segmentation of media. • Large number of possible media to screen. • Absence of reliable information on ‘pass-alongs’ of magazines.

32. Objectives of international PR • Establish a brand image. • Create awareness of the enterprise. TOOLS OF PR • Sponsorship. • Press releases. • Publicity stunts. • Brochures and reports. • Media events.

33. Factors contributing to the growth of Public Relation • Ability to contact opinion leaders. • Large-scale privatizations. • Escalating costs of advertising. • General increase in promotion. • Rising interest in corporate image. • Wider share ownership. • High cost of bad publicity.

34. Drivers for growth in direct marketing • New technology. • Escalating costs of mass media. • Availability of good-quality lists. • Developments in IT. • Improved mail infrastructure. • Improved telecomms infrastructure.

35. Elements in the export plan • Reasons for exporting. • Markets to be entered. • Competitive situation in the target markets. • Products to be offered. • Research methods. • Promotional methods. • Export formalities. • Organization. • Human resource requirements. • Transport and distribution. • Objectives and budgets. • Contingency plans.