Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. What We Are Striving To Accomplish 1.To compare and contrast the merits of standardization versus localization strategies for country markets and of regional versus global marketing efforts. 2.To consider factors affecting the adaptation of products for launch in global markets. 3.To understand the variables that affect pricing different markets and discuss various pricing methods. 4.To evaluate differing distribution channels, including e-commerce. 5.To see how marketers set about selecting the proper combination of promotional tools - advertising, personal selling, sales promotion, and publicity - for targeted global markets.

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 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 Multidomestic approach Globalization approach

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 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

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Product Policy Local behavior, tastes, attitudes, and traditions affect product decisions made by marketers of consumer products. Regional, Country, or Local Characteristics Product Characteristics Company Considerations Decisions to Alter Domestic Product

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Product Positioning The perception by consumers of a firm’s product in relation to competitor’s products.

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 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 policy - “Is it worth it?” - may determine a need for product adaptation. Generally the most profitable domestic product lines are marketed to select international markets then expanded upon acceptance.

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Pricing Policy International pricing is complicated by government influence, different currencies, and additional costs. Price Coordination Transfer (Intracompany) Pricing Foreign Market Pricing Export Pricing International Pricing

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Export Pricing International marketing price-setting strategies: Standard worldwide pricing - average unit costs of fixed, variable, and export-related costs. Dual pricing - export price differs from the domestic price. (cost-plus method or marginal cost method) Market-differentiated pricing - based on customer demand, allows competition consideration.

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Foreign Market and Transfer Pricing Foreign market pricing requires price discrimination by firms conducting business in multiple countries. 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.

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 11 C’s of Channel Design 1. Customers 2. Culture 3. Competitors 4. Company objectives 5. Character 6. Capital 7. Cost 8. Coverage 9. Control 10. Continuity 11. Communication

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 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.

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. E-commerce in Distribution VerticalNet 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

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Promotional Policy A combination of the various promotional tools will create the product and firm’s image among the intended target market. Promotional Tools: Advertising (key decision-making areas below) media strategy - selection of media vehicles creative strategy - consumer’s motivation organization of the promotional program Personal selling Sales promotion Publicity