1. International Business (11) Huang Huiping Economic School.Whut

2. Global R&D Global Manufacturing and Logistic /Supply-chain Management Global Marketing International Services International Financial Management International Accounting and Taxation International Human Resource Management International Business Operations

3. In this unit: What is Global Marketing? 4Ps: Products, Place, Price, Promotion Marketing mix R&D 11. Global Marketing and R&D

4. 11.1.1 Product Attribute: A product can be viewed as a bundle of attribute: design, quality, appearance, brand, utility, performance, service etc. 11.1.2 Market Segmentation: Identify groups of consumers whose purchasing behavior differs from others in important ways. Market can be segmented in many ways, By: - Geography - Demography (sex, age, income, race, education level) - Social-cultural factors ( social class; values; religions; life style); - Psychological factors (personality) 11.1 Product strategy

5. 11.1.3 The product strategy issues - Cultural differences; - Economic development; - Laws and regulations / Product and technical standard; - Brand and Product names; - National image; - Counterfeit goods and black markets - Shortened product life cycle.

6. Distribution strategy: The means a firm chooses for delivering the products to the customers. 11.2 Distribution strategy

7. Manufacturer inside the country Manufacturer outside the country Wholesale distributor Retail distributor Final consumer Import Agent A typical distribution system

8. 11.2.1 Country Differences in distribution system Retail Concentration - Concentrated retail system( 集中的零售体系 ): a few retail supply most of the market. - Fragmented retail system( 分散的零售体系） : many retails, with no one having a major share of the market. Channel Length: the number of intermediaries that a product has to go through before it reaches the final consumers. Exclusive distribution Channel ： is one that is difficult for outsiders to access. Channel Quality: the expertise, competencies and skills of established retailers in a nation, and their abilities to sell the products of intl biz.

9. 11.2.2 Choosing a distribution strategy Which channel the firm will use to reach the potential consumers: - Sell directly vs. Go through retails or wholesaler ? - Import agent? - The length of distribution channel ? Long channel strategy: - In a fragmented system, it is more economical; - More convenient to enter a new market; - Promoting advantages

10. 11.3 Communication Strategy 11.3.1 The Barriers to international communication Cultural barriers Source and country of original effect Q: How to over come negative effects? Noise levels

11. 11.3.2 Push vs. Pull Strategy Push strategy: emphasizing personal selling rather than mass media advertising. Pull strategy: emphasizing media advertising as opposed to personal selling. Considerations: - Product type and consumer sophistication; - Channel length; - Media availability; - The Push-pull mix. Q: When does pull/push work more effectively?

12. 11.3.3 Global Advertising For standard advertising - Economic advantages; - Concentrating the talent ability; - Global brand names. Against standard advertising - Country differences; - Advertising regulations differ.

13. 11.4 Price Strategy Predatory pricing Multipoint pricing Experience curve pricing Regulations and Pricing Anti-dumping policy Competition policy

14. 11.5 Marketing Mix Marketing Mix: Choices about product attribution strategy, distribution strategy, communication strategy, and pricing strategy that a firm offer is target market.

15. 11.6 New product development 11.6.1 Location of R&D New product ideas come from the interactions of scientific research, demand conditions, and competitive conditions. The rate of new-product development is greater in countries where: - Financial aid in basic and applied research - Underlying demand is strong - Consumers are affluent - Competition is intense Q: which developed nations = lead market ??? A: To introduce the new products into all major market ~ Multipoint R&D

16. 11.6.2 Integrating R&D, Marketing, and Production The reasons for high failure rate of new product development: - The demand for the development of technology is limited; - Failure to adequately commercialized promising technology; - Inability to manufacture a new product cost efficiently;

17. Tight cross-functional coordination and integration between R&D, Marketing, and Production, it will ensure: - Product development projects are driven by customs’ needs; - New products are designed for ease manufacture - Development costs are kept in check; - Time to market is minimized.

18. 11.6.3 Cross-Functional Teams Cross-functional integration is facilitated by cross- functional product development teams ( 交叉职能团队） Effective cross functional teams should: be led by a heavyweight project manager with status in the organization have members from all the critical functional areas have members located together have clear goals have an effective conflict resolution process

19. 11.6.4 Building Global R&D Capabilities R&D and marketing need to be integrated to adequately commercialize new technologies Build basic research center

20. Standardization vs. Differentiation - The drivers of Standardization / Differentiation, - The strengths of Standardization / Differentiation, - The problems of Standardization /Differentiation, - The Strategies: - When does a firm need the product Standardization /Differentiation? - Is ISO system necessary? - What did you learn from the Opening Case in this Chapter? - What is marketing mix? Debate 1

21. Global Market vs. Market Segmentation 1. Does a parallel market always exist in another country? Why or why not? 2. How to segment a global market? 3. What are the strengths and challenges of market segmentation? Debate 2

22. Distribution/Place concentrated retail system vs. fragmented retail system Long channel vs. short channel Wide channel and narrow channel Channel exclusivity vs. market entry (P&G case) Debate 3

23. Communication/Promotion Cultural barriers vs. source effect vs. noise level Push vs. Pull Standardized advertising vs. different advertising Closing Case Debate 4

24. Pricing Predatory pricing vs. Multipoint Pricing vs. experience pricing Price discrimination vs. dumping Debate 5

25. New product vs. R&D Location of R&D - Financial aid in basic and applied research - Underlying demand is strong - Consumers are affluent - Competition is intense Debate 6

26. Debate 6: New product vs. R&D How to lower the failure rate of new product development ? ------ Tight cross-functional Integration between R&D, marketing and production can make sure: - Product development project are driven by custom needs - New products are designed for ease manufacture - Development costs are kept in check. - Time to market is minimized.

27. Debate 6: New product vs. R&D Cross-functional Teams - Leader: heavyweight project manager - Keep at least one member from every Key function - Members should be physically co-located - A clear plan - Develop one’s own process for communication and conflict resolution.