International Marketing

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Standardization–Localization Dichotomy Homogeneity of consumer demand Economies of scale and scope Presentation of a consistent image (global branding) Managerial / operational efficiencies Infrastructure demands Media availability Distribution differences Legal restrictions Physical environment Transport and communication

Homogeneity of consumer demand

Economies of scale and scope

Presentation of a consistent image (global branding)

Managerial / operational efficiencies

Infrastructure demands

Media availability

Distribution differences

Legal restrictions

Physical environment

Transport and communication

Is Customer Demand Truly Global? Are tastes homogenous? Are individuals willing to concede product differentiation for price? Are marketing skills transferable across borders? Are there real benefits to the firm from: EOS and EO Scope? Global branding (Consistency in image)? Managerial marketing efficiencies?

Are tastes homogenous?

Are individuals willing to concede product differentiation for price?

Are marketing skills transferable across borders?

Are there real benefits to the firm from:

EOS and EO Scope?

Global branding (Consistency in image)?

Managerial marketing efficiencies?

Marketing Standardisation vs. Specialisation National Responsiveness Global Integration Range of Product Standardization Range of Process Standardization

Three Roles of Marketing Marketing Mix (Product, Price, Promotion and Placement Degree and Structure of Marketing “Standardization” COMPANY CULTURE COUNTRY CULTURE Linkage Configuration Coordination Marketing, Production, R&D, ....

General Rules on Local vs. Global Marketing The greater the cultural grounding , the more likely local responsiveness is better Unique utility benefits versus performance and money Marketing mix (pricing, advertising themes, promotions) is more difficult to standardize than positioning elements (product attributes) Country size makes large economies resistant to globalization Economies of scale and scope increase the likelihood of marketing globalization

The greater the cultural grounding , the more likely local responsiveness is better

Unique utility benefits versus performance and money

Marketing mix (pricing, advertising themes, promotions) is more difficult to standardize than positioning elements (product attributes)

Country size makes large economies resistant to globalization

Economies of scale and scope increase the likelihood of marketing globalization

Coordination of Marketing Activities Coordination of marketing activities does not imply standardization of product but standardization of process Benefits of using similar methods of performing activities: EOS in training activities Easier quality and performance evaluation Transparent movement of personnel More rapid transference and implementation of strategy Easier transfer of knowledge Sharing of entry and competitive strategies Sharing of marketing information Secondary effects on the size of company operations $ MC MB Number of Distinctive Activities A*

Coordination of marketing activities

does not imply standardization of product

but standardization of process

Benefits of using similar methods of performing

activities:

EOS in training activities

Easier quality and performance evaluation

Transparent movement of personnel

More rapid transference and implementation of strategy

Easier transfer of knowledge

Sharing of entry and competitive strategies

Sharing of marketing information

Secondary effects on the size of company operations

How Information Affects the Scale of a Company ATC P ATC Information ATC P + Information Quantity Q Min P + I Q Min P $ Min P P Min P + I P

Coordination of Marketing Activities Sequencing of marketing programs Ability to allow marketing strategy to evolve with the market Ability to diffuse new products across markets Integration of marketing efforts Relations with multinational customers Marketing research and R&D coordination Lead Market Second-Tier Market Rest of the World Time Sales World Sales Pattern

Sequencing of marketing programs

Ability to allow marketing strategy to evolve with the market

Ability to diffuse new products across markets

Integration of marketing efforts

Relations with multinational customers

Marketing research and R&D coordination

Linking Marketing with Other Functions Supporting the development of global products Universal products—product the same everywhere Modified products—product contains a fundamental core but is different in locally important ways Country-tailored products—product can differ dramatically from market to market Creating and fostering demand for new ‘global’ products Segmentation and physical product design Identifying segments present in most countries Targeting different segments in different countries Identifying customer/country groups Tailoring the product(s) with service and accessories

Supporting the development of global products

Universal products—product the same everywhere

Modified products—product contains a fundamental core but is different in locally important ways

Country-tailored products—product can differ dramatically from market to market

Creating and fostering demand for new ‘global’ products

Segmentation and physical product design

Identifying segments present in most countries

Targeting different segments in different countries

Identifying customer/country groups

Tailoring the product(s) with service and accessories

Global Product Country B Product Country A Product CORE PRODUCT

Country-Tailored Products Country B Product Country A Product Country C Product CORE PRODUCT

An Example of Different Linkage Structures Full Linkage Complete Localization R & D Procurement Marketing Manufacturing R & D Finance & Control Procurement Marketing Manufacturing Finance & Control

Overall Marketing Matrix Approach Target Country World Segmentation Universal Diverse & Diffuse Product Universal Country-Cantered Region Modified

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