1. FMA 601 Foreign Market Analysis
Module 5:
Product Decision and Pricing

2. Local, National, International and Global Products
Local products are offered in a portion of a national market
National products are offered in a single national Market
International products are offered in multinational, regional markets
Global products are offered in the global market. They are international and multi-regional

3. The Global Product Launch
Introducing the product into countries in three or more regions within a narrow timeframe.
Successful launches require:
Involvement of country managers
Pre-launch attention to localization
Increased education and support of the sales channel
Benefits of a global launch
Showcases the product
Removes old models at once
Captures new product’s higher margins

4. Example of a Product-Market Portfolio40 40 B B B S J S F F GB GB D D 10 10
Market Growth C US US C 10 1 10 1
Relative Market Share
Relative Market Share
Company A
Company B
(B=Brazil, C=Canada, D=Germany, F=France, GB=Great Britain, J=Japan, S=Spain, US=United States)

5. Market Expansion Strategies
Narrow focus: concentrated markets/concentrated countries
Country focus: diverse markets/concentrated countries
Country diversification: concentrated markets/diverse countries
Global diversification: diverse markets/diverse countries

6. Global Brands
A symbol about which customer have beliefs and perceptions
Same name or same meaning in another language
Similar image and position
Guided by same strategic principles
Marketing mix may vary from country to country

7. Product Positioning Attribute or Benefit Quality/Price Use/User
High-Tech Positioning
High-Touch Positioning

8. Global Product Positioning: Strategic Alternatives

9. Creating a Product-Market Profile
Who buys our product?
Who does not buy our product?
What need does our product serve?
What problem does our product solve?
What are customers currently buying? What price are they paying?
When is our product purchased?
Where is our product purchased?
Why is our product purchased?

10. Visiting the Potential Market
Essential after assessment and selection of potential market(s)
Goals:
to confirm (or contradict) assumptions regarding market potential
to gather additional (primary) data
to develop a marketing plan in co-operation with the local agent or distributor

11. Global Product Development
The heart of the global marketing process that focuses on building adaptability into products to achieve worldwide appeal.
The product development process
The main goal is to build adaptability into products and product lines for worldwide appeal.
Step 1: Idea generation
Step 2: Screening
Step 3: Product/process development
Step 4: Scale up
Step 5: Commercialization

12. Basic Pricing Concepts
Cost
The experience curve
Competition
Demand

13. The Setting of Export Prices
EXTERNAL
Market-related factors
Nature of demand/target audience characteristics
Government regulations (e.g., duties)
Exchange rate stability
Industry-related factors
Competition intensity
Nature of competition
ASSESSMENT OF PRICING ENVIRONMENTS
INTERNAL
Marketing Mix
Product (e.g., old/new; standardized/differentiated
Distribution system (e.g., length)
Promotion needs (e.g., sales efforts)
Company characteristics
Extent of internationalization
Countries exported to
Management attitudes
Importance of exports
Overall price position of firm
Pricing Policy Selection
Pricing Strategy Determination
Setting of Specific Price

14. Penetration Pricing
Uses price as a competitive weapon to gain market position
Means that the product may be sold at a loss for a certain time to gain market share
Companies new to exporting cannot absorb such losses

15. Gray Market Goods
Trademarked products that are exported form one country to another where they are sold by unauthorized persons or organizations
Bring a product produced in one country into another in competition with authorized importers – parallel importing

16. Dumping
A company exports a product at a price lower than the price it normally charges in its own home market
Dumping is an important global pricing issue, because it is sometimes regarded as unfair competition

17. Price – Service – Value Value Service Good Restaurant B Restaurant A
Restaurant C
Restaurant D
Poor
Slow
Fast
Service