1. International Business (10)
Huang Huiping
Economic School.Whut

2. International Business Operations
Global R&D
Global Production and Logistic
Global Marketing
International Services
International Financial Management
International Accounting and Taxation
International Human Resource Management

3. 10. Global Marketing and R&D

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

5. Debate 1 Global Marketing
Marketing vs. sale
Standardization vs. Differentiation
The strengths of Standardization / Differentiation?

6. INTRODUCTION
Global Marketing views the world’s consumers as similar in their tastes and preference, and adopts standard marketing strategies.
The marketing mix (the set of choices the firm offers to its targeted market) is comprised of:
product attributes
distribution strategy
communication strategy
pricing strategy

7. Debate 2: Global Market vs. Market Segmentation
How to segment a global market? How do we define an efficient Market Segmentation?
Does a parallel market always exist in another country? Why or why not?

8. Market Segmentation:
Market Segmentation (市场细分）：To 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)
Efficient segmentation:
Size, stability, identification, economic, competition intensity .

9. Debate 3: Product strategy
What are the business implications of a product viewed as a bundle of attribute?
What issues do we concern when we adopt product strategies?

10. Product strategy Product Attribute: Implications:
A product can be viewed as a bundle of attribute: design, quality, appearance, brand, utility, performance, service etc.
Implications:
- Product attribute offers more ideas for product strategies!
- New product: any innovation in product attribute can led to a new product!

11. 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.

12. Debate 4 Distribution/Place
concentrated retail system vs. fragmented retail system
Long channel vs. short channel
Wide channel vs. narrow channel
Channel exclusivity vs. market entry
(P&G case)

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

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

15. 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.
Trends: more concentrated
because of shopping habits changing

16. (2) Channel Length: the number of intermediaries that a product has to go through before it reaches the final consumers.
- Trends: shorten length
Because of : internet, entry of large discount superstores,
(3) Exclusive distribution Channel ：is one that is difficult for outsiders to access.
- How to overcome these barriers?

17. (4) Channel Quality
Channel quality refers to the expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international businesses
How to upgrade channel quality?

18. 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

19. Debate 5 Communication/Promotion
Cultural barriers vs. source effect vs. noise level
Push vs. Pull
Standardized advertising vs. different advertising

20. Communication Strategy
The Barriers to international communication
Cultural barriers
Source and country of original effect
Q: How to overcome negative effects?
Noise levels: refers to the amount of other messages competing for a potential consumer’s attention

21. 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?

22. Push versus Pull Strategies
In general, a push strategy is better:
for industrial products and/or complex new products
when distribution channels are short
when few print or electronic media are available
A pull strategy is better:
for consumer goods products
when distribution channels are long
when sufficient print and electronic media are available to carry the marketing message
Management Focus: Unilever—Selling to India’s Poor
Summary
This feature explores Unilever’s innovative global marketing strategy. Unilever maintains a substantial presence in many of the world’s poorer nations where low-income levels, unsophisticated consumers, illiteracy, a fragmented retail distribution system, and unpaved roads make marketing difficult. Still, the company has managed to succeed thanks to its efforts to customize its marketing strategy to the local market.
Suggested Discussion Questions
1. Discuss the effects of India’s culture on each of the components of Unilever’s marketing strategy. What can Unilever learn from its experiences in India?
Discussion Points: In India, Unilever faces numerous challenges to its marketing strategy. Income levels are low, consumers are unsophisticated and illiterate, the retail distribution system is fragmented, and the road system is poor. However, by adapting to the environment, Unilever has built a small, but successful business in the country. Because most consumers do not have access to television, the company posts advertisements in common meeting areas such as village wells and marketplaces. The company also takes part in weekly markets where it not only sells its products, but it also gives away free samples. Unilever has also made a strong effort to fit in with the country’s retail system, and stocks its products in small size packages in about 3 million stores, many of which are very tiny.
2. Is Unilever’s strategy in India a push strategy or a pull strategy? Explain.
Discussion Points: Most students will suggest that Unilever’s strategy in India is a push strategy. The country has few mass media options, and the company has been forced to take a unique approach to developing awareness of its products among consumers. Unilever representatives frequently establish a presence in locations where people tend to congregate such as riverbanks where clothes washing takes place, or the village well or marketplace.
Another Perspective: As noted earlier, Unilever’s web site is worth a visit. Go to the company’s India site by selecting it from the list available on the homepage { and compare the company’s marketing efforts there to the strategy used in other countries.

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

24. Debate 6
Pricing
Predatory pricing vs. Multipoint Pricing vs. experience pricing?
Price discrimination vs. dumping?

25. Debate 7 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

26. 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. 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.

28. Building Global R&D Capabilities
To adequately commercialize new technologies, firms need to integrate R&D and marketing
Commercialization of new technologies may require firms to develop different versions for different countries
This may require R&D centers in North America, Asia, and Europe that are closely linked by formal and informal integrating mechanisms with marketing operations in each country in their regions, and with the various manufacturing facilities