PRESENTED BY:   Daksha Shukla      (11DCP017)     Nishant Puri      (11DCP029)Amritanshu Mehra      (11DCP008)       Ravi ...
What is Global     Marketing    The decision to    Internationalize Scanning the GlobalMarketing EnvironmentFactors determ...
   Basically ‘global marketing’ consists of finding and satisfying global    customer needs better than the competition, a...
   Expanding sales into foreign markets    Ranbaxy   Access to new and potentially more profitable markets    Coca-Cola a...
   Industry globalism    The more culturally unbounded the product is, the    more a global clustering can take place and...
   Preparedness for internationalization    The degree of preparedness is dependent on the firm’s    ability to carry out ...
Prepared    Hne     i                                  Prepare for        Strengthen your global           Enter new busin...
   Lack of international experience and a weak position in the    home market   If the firm finds itself in a global indus...
 “Think globally but act locally’ Local flexibility while exploiting the benefits of global  integration and efficiencies, ...
Japan                       chicken tatsuta                       teriyaki chicken                       Teriyaki McBurger...
   Proactive motiveso   Profit and growth goalso   Managerial urgeo   Technology competence/unique producto   Foreign mark...
   Reactive motiveso   Competitive pressureso   Domestic market: small and saturatedo   Overproduction/excess capacityo  ...
Saturated Korean MarketsJapanese market saturatedwith Toyota and Nissan - >Honda moving to Americanmarkets
The Chinese manufacturer of home appliances ,Haier  Group, was near bankruptcy when Mr Zhang Ruimin was  appointed plant d...
   Insufficient finances   Insufficient knowledge   Lack of foreign market connections   Lack of export commitment   Lac...
   Comparative market distance;   Competition from other firms in foreign markets;   Differences in product usage in for...
   Exchange rate fluctuations when contracts are made in a    foreign currency   Failure of export customers to pay due t...
 Foreign government restrictions National export policy Foreign exchange controls imposed by host governments  that lim...
   Lack of familiarity with customers, competitors and the    market environment in other countries, coupled with the    ...
   Primary data.    This can be defined as information that is collected first-    hand, generated by original research tai...
   Internal data sources    Total sales , Sales by country, Sales by products , Sales    volume by market segment , Sales...
   Those variables , largely out of the organizations control but    which it must account for , within which it conducts...
i. Reduce Riskii. Isolate most important variables so that highest attention canbe payed to those.iii. Aids in strategy pl...
   Cultural Environmento   Culture is the collective programming of the mind which    distinguishes the members of one hu...
• Takes into account Time, Space , Material Possessions , friendship patterns and business agreements.o Thumbs up after a ...
   Nike offended Muslims in June, 1997   “Flaming air” logo for its Nike Air sneakers looked too similar    to the Arabi...
   Differences in Gift giving behaviour   Differences in eating habbits
   HUL learned that low income Indians usually forced to settle    down for lower quality products wanted to buy high end...
Forced out of India as Indiangovernment was trying to prevent itsown soft drink industry •Japanese law prevents foreign co...
The launch of the international liquor              brands of Seagram & W D Gilbey coincided              with prohibition...
   Embargoes or sanctions by the UN or individual governments to    limit trade to specific countries, a popular politica...
   The competitive environment consists of all the organizations    that attempt to serve similar customers.o   Brand com...
   Internal Factors   External Factors   Desired Mode Characteristics
 Firm   Size International   Experience Product/Service
   More the Size  More the resource availability     Provides basis for increased International Involvement    over tim...
   Another important factor, refers to the international    experience of the managers and thus of the firm   Uncertaint...
   The nature of the product affects channel selection because    products vary widely in their characteristics and use ...
   Hard services are those where production and consumption    can be decoupled. For example software services can be    ...
 Sociocultural   Distance Country    Risk/Demand Uncertainty Market    Size and Growth Direct   and Indirect Trade Bar...
   The greater the perceived distance between the home and    host country in terms of culture, economic systems and    b...
   When planning its method of entry the firm must do a risk    analysis of both the market and its entry mode.   Exchan...
   The larger the country and the size of its market, and the    higher the growth rate, the more likely it is that the f...
   Tariffs or quotas on the import of foreign goods and    components is one important factor.   Product or trade regula...
   In such a case the market field is subject to the opportunistic    behavior of the few export intermediaries, and this...
   Distribution channels in Japan are very different. They are as    inefficient as they are complex.   The system is ch...
 Risk   Averse Control Flexibility
   If the decision maker is risk averse they will prefer export    modes (e.g. indirect and direct exporting) or licensin...
   Control is often closely linked to the level of resource    commitment.   Exporting, provide little or no control ove...
   There’s always a flexibility associated with every mode of    entry   Modes like Wholly owned Subsidiaries (involving...
 EXPORTING   • DIRECT   • INDIRECT LICENSING FRANCHISING TURNKEY PROJECTS   • WHOLLY OWNED SUBSIDARIES   • JOINT VENTU...
   Indirect exports is the process of exporting through    domestically based export intermediaries.   The exporter has ...
i)     Domestic-based export merchants        Buy the manufacturer’s products and then sell them abroad.ii)    Domestic-b...
Advantages Less Investment : The firm does not have to develop an export  department, an overseas sales force, or a set o...
   Direct exporting involves selling directly to your target    customer in market. This could be from your home country ...
Advantages : You are in control of pricing, your brand. You get a direct understanding of buyers or end users needs  and...
   Is a simple way to engage in international marketing.   The licensor issues a license to a foreign company to use a  ...
   The licensor has less control over the licensee than if it had set    up its own production and sales facilities.   F...
   Now to avoid a situation like this, Coca-Cola usually supplies    some proprietary ingredients or components needed in...
 Some   examples
Companies such as Hyatt and Marriot sell managementcontracts to owners of foreign hotels to manage thesebusinesses for a f...
   The firm hires local manufacturers to produce the product.   When Sears opened department stores in Mexico and Spain,...
Advantages :• Definitely there’s chance to start faster.• Less risk• There’s opportunity to form a partnership or buy out ...
   A system in which semi-independent business owners    (franchisees) pay fees and royalties to a parent company    (fra...
   Compared to licensing, franchising agreements tends to be    longer and the franchisor offers a broader package of rig...
Someexamples
 Wholly    Owned Subsidiaries(WOS) Joint   Venture (JV) Strategic   Alliance
   A turnkey project refers to a project in which clients pay    contractors to design and construct new facilities and t...
Can be further classified into : Greenfield   Investments Acquisitions
   It is the establishment of a new wholly owned subsidiary. It is    often complex and potentially costly, but gives ful...
 Some   Examples :
   Hyundai Motor Company planned a major greenfield    investment in Nošovice in the Moravia-Silesia region of the    Cze...
   Mercedes Benz began its Indian production in the mid-1990s from a    plant based in the small town of Pimpri.   In 20...
   Carrefour’s South Korean Investment   Riding on its successful retail history, Carrefour chose to venture    into a c...
   It has become a popular mode of entering foreign markets    mainly due to its quick access.   It offers the fastest, ...
 Some   Examples :
   Volkswagen’s acquisition of Skoda   Skoda, set up in the 1895 is one of the oldest car companies in    the world. It ...
   In 2005, eBay, the multibillion dollar internet auction site    decided it was time to purchase Skype for a whopping U...
   Foreign investors may join with local investors to create a joint    venture company in   which they share ownership ...
   Coca-Cola and Nestle joined forces to develop the    international market for “ready to drink” tea and coffee, which  ...
   Whirlpool took a 53 percent stake in the Dutch electronics    group Philips’s white goods business to leapfrog into th...
   It’s a term used to describe a variety of cooperative    agreements between different firms, such as shared research, ...
   This is an extensive, far-ranging partnership, bringing together    each company’s respective strengths today and exte...
MARKETING MIX     PRODUCT     PRICING     PLACING    PROMOTION
MARKETING MIX                                                       PRODUCT                                               ...
MARKETING MIX                                       PRODUCT   GLOBAL                 LOCAL PRODUCT          PRICING  PRODU...
MARKETING MIX     PRODUCT      PRICING      PLACING     PROMOTION
NATIONAL   MARKETING MIXPRODUCT                PRODUCT                 PRICING                 PLACING                PROM...
MARKETING MIXINTERNATIONAL PRODUCT        PRODUCT                              PRICING                              PLACIN...
MARKETING MIXGLOBAL PRODUCT        PRODUCT                       PRICING                       PLACING                    ...
MARKETING MIX      PRODUCT POSITIONING                                                      PRODUCT                       ...
MARKETING MIXPRODUCT POSITIONING                           PRODUCT                            PRICINGATTRIBUTE/BENEFIT    ...
MARKETING MIX        ATTRIBUTE/BENEFIT                                                              PRODUCT               ...
MARKETING MIX     ATTRIBUTE/BENEFIT                                                    PRODUCT                            ...
MARKETING MIX            QUALITY/PRICE                                                              PRODUCT               ...
MARKETING MIX          QUALITY/PRICE                                                                   PRODUCT            ...
MARKETING MIX                USE/USER                                                              PRODUCT                ...
MARKETING MIX                USE/USER                                                              PRODUCT                ...
MARKETING MIX                HIGH-TECH                                                                PRODUCT             ...
MARKETING MIX              HIGH-TECH                                      PRODUCT                                       PR...
MARKETING MIX              HIGH-TOUCH                                                                PRODUCT              ...
MARKETING MIX            HIGH-TOUCH                                         PRODUCT                                       ...
PRODUCT SATURATION                      MARKETING MIX      LEVELS IN MARKET                            PRODUCT            ...
PRODUCT SATURATION                               MARKETING MIX  LEVELS IN MARKET                                     PRODU...
PRODUCT SATURATION                     MARKETING MIX      LEVELS IN MARKET                           PRODUCT              ...
MARKETING MIX                    PRODUCT                     PRICING                     PLACING                    PROMOT...
MARKETING MIX   PRODUCT DESIGN                           PRODUCT                            PRICINGPREFERENCES            ...
MARKETING MIX             PREFERENCES                                                               PRODUCT               ...
MARKETING MIX                       COST                                                              PRODUCT             ...
MARKETING MIX             COMPATABILITY                                                             PRODUCT               ...
MARKETING MIX     LAWS AND REGULATIONS                                                                  PRODUCT           ...
MARKETING MIX   GEOGRAPHIC EXPANSION                                                               PRODUCT                ...
MARKETING MIX      STRAIGHT EXTENSION                                                      PRODUCT                        ...
MARKETING MIX   STRAIGHT EXTENSION                                                   PRODUCT                              ...
MARKETING MIX    PROMOTION ADAPTATION                                                            PRODUCT                  ...
MARKETING MIXPRODUCT ADAPTATION                                                        PRODUCT                            ...
MARKETING MIX         DUAL ADAPTATION                                                      PRODUCT                        ...
MARKETING MIX          DUAL ADAPTATION                                                      PRODUCT                       ...
MARKETING MIX        PRODUCT INVENTION                                                                 PRODUCT            ...
MARKETING MIX                    PRICING                                                              PRODUCT             ...
MARKETING MIX                    PRICING                                                                  PRODUCT         ...
GLOBAL PRICING OBJECTIVES   MARKETING MIX     AND STRATEGIES              PRODUCT                                  PRICING...
MARKETING MIX         MARKET SKIMMING                                                               PRODUCT               ...
MARKETING MIX     MARKET SKIMMING                                                           PRODUCT                       ...
MARKETING MIX      PENETRATION PRICING                                                              PRODUCT               ...
MARKETING MIX      PENETRATION PRICING                                                                      PRODUCT       ...
MARKETING MIX          MARKET HOLDING                                                                PRODUCT              ...
MARKETING MIX          MARKET HOLDING                                                          PRODUCT                    ...
GLOBAL MARKETING CHANNELS AND                                MARKETING MIX    PHYSICAL DISTRIBUTIONS                      ...
MARKETING CHANNELS -                                  MARKETING MIX          PURPOSE                                      ...
MARKETING CHANNELS -                                 MARKETING MIX       PURPOSE                                          ...
SELECTION OF CHANNEL                              MARKETING MIX         DECISIONS                                         ...
FACTORS CONSTRAINING THE SELECTION   MARKETING MIX OF SHAPING INTERNATIONAL CHANNELS        PRODUCT                       ...
MARKETING MIX    CUSTOMER CHARACTERISTICS                                                                 PRODUCT         ...
MARKETING MIX    PRODUCT CHARACTERISTICS                                                                     PRODUCT      ...
MARKETING MIXPRODUCT CHARACTERISTICS                                                          PRODUCT                     ...
MARKETING MIXMIDDLEMAN CHARACTERISTICS                                                                  PRODUCT           ...
MARKETING MIXMIDDLEMAN CHARACTERISTICS                                                              PRODUCT               ...
ENVIRONMENTAL                                   MARKETING MIX              CHARACTERISTICS                                ...
MARKETING MIX      DISTRIBUTION CHANNELS                                                             PRODUCT              ...
MARKETING MIXDISTRIBUTION CHANNELS                             PRODUCT                              PRICING               ...
MARKETING MIX         CONSUMER PRODUCTS                                                       PRODUCT                     ...
MARKETING MIX        INDUSTRIAL PRODUCTS                                                             PRODUCT              ...
MARKETING MIX    INDUSTRIAL PRODUCTS                                                        PRODUCT                       ...
MARKETING MIX           GLOBAL RETAILING                                                        PRODUCT   Global retailin...
MARKETING MIX           GLOBAL RETAILING                                                           PRODUCT                ...
CHANNEL STRATEGY FOR NEW                               MARKETING MIX     MARKET ENTRY                                     ...
CHANNEL STRATEGY FOR NEW                                   MARKETING MIX         MARKET ENTRY                             ...
CHANNEL STRATEGY FOR NEW                                     MARKETING MIX     MARKET ENTRY                               ...
MARKETING MIX                                                                                PRODUCT                      ...
MARKETING MIX                                                                 PRODUCT                                     ...
MARKETING MIX                                                                 PRODUCT                                     ...
Coca-Cola, the most global brand in the world,           MARKETING MIXrecords radio spots in 40 languages with 140        ...
MARKETING MIX                                                                  PRODUCT                                    ...
MARKETING MIX                                                                             PRODUCT                         ...
MARKETING MIX                                                                            PRODUCT                          ...
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Global Marketing
Upcoming SlideShare
Loading in...5
×

Global Marketing

4,737

Published on

An introduction to Global Marketing

Published in: Education, Business
0 Comments
6 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
4,737
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
6
Embeds 0
No embeds

No notes for slide
  • though prefer high level of control over international operations,wish to make heavy resource commitments to foreign markets but they are more likely to enter foreign markets using export modesbecause they do not have the resources necessary to achieve a high degree of control or to make these resource commitments.
  • To avoid this, the licensor usually supplies some proprietary ingredients or components needed in the product (as Coca-Cola does). But the best strategy is for the licensor to lead in innovation so that the licensee will continue to depend on the licensor.
  • A local product is available in a portion of the national market. Originally, Cape Cod potato chips was a local product in the New-England market. The company was later purchased by Frito-Lay and distribution was expanded to the other regions of the U.S.
  • A national product is the one that, in context of a particular company is offered in a single national market. Sometimes national products appear when a global economy caters to the needs and preferences of particular country markets. For example, Coca-cola developed a non-carbonated, ginseng-flavoured beverage for sale only in Japan and a yellow, carbonated flavoured drink called Pasturina to compete with Peru’s favourite soft drink, Inca Cola.
  • International products are those which are offered in multinational, regional markets. The classic international product is the Euro product, offered throughout Europe but not in the rest of the world. Renault was for many years an international product.
  • Global products are those which are offered in the global markets. A truly global product is that which is offered in the Triad, in every world religion, and in countries at every stage of development. Coke is the quintessential global product and global brand. Coke’s position and strategy are the same in all countries; it projects a global image of fun, good times and enjoyment. Coke is the ‘real thing’. The company’s strategy is to make sure that the product is within arm’s reach of desire. However, the marketing mix of coke varies. The product itself is adapted to suit local tastes; for example, Coke increases the sweetness of its beverages in the middle east, where customers prefer a sweeter drink. Also, prices may vary to suit local competitive conditions, and the channels of distribution may differ. However, the basic, underlying, strategic principles that guide the management of the brand are the same worldwide.
  • In certain circumstances the company has to adapt different designs for national markets whereas in others the company adapts a single design for the global market.
  • The companies can grow in three different ways. The traditional methods of market expansion – further penetration of existing markets to increase market share and extension of the product line into new-product market areas in a single national market – are both available in domestic operations. In addition, a company can expand by extending its existing operations into new countries and areas of the world.
  • Pricing objectives may vary, depending on a product’s life-cycle stage and the country-specific competitive situation.
  • Transcript of "Global Marketing"

    1. 1. PRESENTED BY: Daksha Shukla (11DCP017) Nishant Puri (11DCP029)Amritanshu Mehra (11DCP008) Ravi Gupta •(11DCP038)
    2. 2. What is Global Marketing The decision to Internationalize Scanning the GlobalMarketing EnvironmentFactors determining the entry mode decisionEntry Mode StrategiesDeciding on the Global Marketing ProgramDeciding on the GlobalMarketing Organization
    3. 3.  Basically ‘global marketing’ consists of finding and satisfying global customer needs better than the competition, and of coordinating marketing activities within the constraints of the global environment. OR The process of conceptualizing and then conveying a final product or service worldwide with the hopes of reaching the international marketing cmmunity OR Global marketing is defined as the firm’s commitment to coordinate its marketing activities across national boundaries in order to find and satisfy global customer needs better than the competition. This implies that the firm is able to:o develop a global marketing strategy, based on similarities and differences between marketso exploit the knowledge of the headquarters (home organization) through worldwide diffusion (learning) and adaptationso transfer knowledge and ‘best practices’ from any of its markets and use them in other international markets.
    4. 4.  Expanding sales into foreign markets Ranbaxy Access to new and potentially more profitable markets Coca-Cola and Pepsi receive more than half of their revenues from operations outside the United States Increasing the firm’s competitiveness Mobil, Texaco, and Exxon also realized they had to increase their international market share to keep pace with foreign competitors such as British Petroleum and Royal Dutch Shell Access to new product ideas, manufacturing innovations and the latest technology
    5. 5.  Industry globalism The more culturally unbounded the product is, the more a global clustering can take place and the more a standardised approach can be made in the design of marketing programmes
    6. 6.  Preparedness for internationalization The degree of preparedness is dependent on the firm’s ability to carry out strategies in the international marketplace, i.e. the actual skills in international business operations. These skills or organizational capabilities may consist of personal skills (e.g. language, cultural sensitivity, etc.), the managers’ international experience or financial resources.
    7. 7. Prepared Hne i Prepare for Strengthen your global Enter new businesss g globalization positions hFor M Consolidate your export Consider expansion inI e Seek global alliances markets international marketsn dterna Seek niches inti L Stay at home Prepare for a buy-outo o international marketsna wliza Low Medium Hightion Industry Globalism
    8. 8.  Lack of international experience and a weak position in the home market If the firm finds itself in a global industry as a dwarf among large multinational firms, it may seek ways to increase its net worth so as to attract partners for a future buyout bid. If the firm has already acquired some competence in international business operations it can overcome some of its competitive disadvantages by going into alliances with firms representing complementary competences
    9. 9.  “Think globally but act locally’ Local flexibility while exploiting the benefits of global integration and efficiencies, as well as ensuring worldwide diffusion of innovation ‘Glocalization’ tries to optimise the ‘balance’ between standardization and adaptation of the firm’s international marketing activities
    10. 10. Japan chicken tatsuta teriyaki chicken Teriyaki McBurger Thailand India Kiwi Burger Aloo Tikki Maharaja MacSingapore GermanyKiasuburger Chicken BeerBreakfast McCroissants Thailand Samurai Pork Burger
    11. 11.  Proactive motiveso Profit and growth goalso Managerial urgeo Technology competence/unique producto Foreign market opportunities/market informationo Economies of scaleo Tax benefits
    12. 12.  Reactive motiveso Competitive pressureso Domestic market: small and saturatedo Overproduction/excess capacityo Unsolicited foreign orderso Extend sales of seasonal productso Proximity to internationalo customers/psychological distance
    13. 13. Saturated Korean MarketsJapanese market saturatedwith Toyota and Nissan - >Honda moving to Americanmarkets
    14. 14. The Chinese manufacturer of home appliances ,Haier Group, was near bankruptcy when Mr Zhang Ruimin was appointed plant director in 1984, the fourth one that year. Proactive Motives Reactive motivesZhang Ruimin had an Entry of global home applianceinternationalization mindset manufacturers into the Chinese market forced Haier to seek international expansion Since China joined the WTO almost every international competitor had invested in China, establishing wholly- owned companies. Saturation of the Chinese home appliance market Price wars – potential for further development was limited
    15. 15.  Insufficient finances Insufficient knowledge Lack of foreign market connections Lack of export commitment Lack of capital to finance expansion into foreign markets Lack of productive capacity to dedicate to foreign markets Lack of foreign channels for distribution Management emphasis on developing domestic markets Cost escalation due to high export manufacturing, distribution and financing expenditures.
    16. 16.  Comparative market distance; Competition from other firms in foreign markets; Differences in product usage in foreign markets; Language and cultural differences; Difficulties in finding the right distributor in the foreign market; Differences in product specifications in foreign markets; Complexity of shipping services to overseas buyers.
    17. 17.  Exchange rate fluctuations when contracts are made in a foreign currency Failure of export customers to pay due to contract dispute, bankruptcy, refusal to accept the product or fraud Delays and/or damage in the export shipment and distribution process; Difficulties in obtaining export financing
    18. 18.  Foreign government restrictions National export policy Foreign exchange controls imposed by host governments that limit the opportunities for foreign customers to make payment Lack of governmental assistance in overcoming export barriers Lack of tax incentives for companies that export High foreign tariffs on imported products Confusing foreign import regulations and procedures Complexity of trade documentation Enforcement of national legal codes regulating exports Civil strife, revolution and wars disrupting foreign markets
    19. 19.  Lack of familiarity with customers, competitors and the market environment in other countries, coupled with the growing complexity and diversity of international markets makes it increasingly critical to collect information in relation to these markets. The term ‘marketing research’ refers to gathering, analysing and presenting information related to a well-defined problem. Hence the focus of marketing research is a specific problem or project with a beginning and an end.
    20. 20.  Primary data. This can be defined as information that is collected first- hand, generated by original research tailor-made to answer specific current research questions. Secondary data This can be defined as information that has already been collected for other purposes and is thus readily available. Advantages : Less expensive and less time consuming Disadvantages : Data reliability and comparability
    21. 21.  Internal data sources Total sales , Sales by country, Sales by products , Sales volume by market segment , Sales volume by type of channel distribution , Pricing information , Communication mix information External data sources Electronic databases
    22. 22.  Those variables , largely out of the organizations control but which it must account for , within which it conducts its business globally.
    23. 23. i. Reduce Riskii. Isolate most important variables so that highest attention canbe payed to those.iii. Aids in strategy planning and decision makingiv. Aids in deciding which are the markets to enter and plan onthe appropriate marketing mix.v. Evaluate and assess the risk of doing business with differentcountries.
    24. 24.  Cultural Environmento Culture is the collective programming of the mind which distinguishes the members of one human group from another . Culture, in this sense, includes systems of values.o Some cultural differences are easier to manage than others.o Greater problem is to understand the underlying attitudes and values of buyers in different countries.
    25. 25. • Takes into account Time, Space , Material Possessions , friendship patterns and business agreements.o Thumbs up after a deal- US – OK- South France – The deal was worthless- Japan – Little bribe has been asked for the dealo Herman Miller did an office installation for Monsanto in India Workers wanted to work more collaboratively, but their arrangement of cubicles was an obstacle.
    26. 26.  Nike offended Muslims in June, 1997 “Flaming air” logo for its Nike Air sneakers looked too similar to the Arabic form of God’s name, “Allah”. Nike pulled more than 80,000 pairs of sneakers from the market
    27. 27.  Differences in Gift giving behaviour Differences in eating habbits
    28. 28.  HUL learned that low income Indians usually forced to settle down for lower quality products wanted to buy high end detergents and personal care products, but could not afford them in the quantities available In response the company developed extremely low cost packaging material and other innovations that allowed for a product priced in pennies instead of the $4 to $15 price of the regular containers.
    29. 29. Forced out of India as Indiangovernment was trying to prevent itsown soft drink industry •Japanese law prevents foreign companies to open branches in Japan •For example, the only foreign bank allowed to have "almost" regular operations in Japan is Citibank (but there are restrictions; e.g. no business bank account can be open there). •Other foreign bank may have a representative branch (HSBC, Lloyds, BNP-Paribas, etc. have one) but people cant open a bank account there. •Until about some years ago, it was not even allowed for a foreign company to purchase (take over) a Japanese company.
    30. 30. The launch of the international liquor brands of Seagram & W D Gilbey coincided with prohibition being imposed in some of the high potential states like Andhra Pradesh & Haryana , giving them a run for their money.A federal court ruled that American Airlines was notguilty of trying to drive weaker competitors out ofbusiness when it slashed fares in 1992. In contrast, astate court in Arkansas found Wal-Mart guilty ofpredatory pricing by selling pharmacy products belowcost to drive out competitors.
    31. 31.  Embargoes or sanctions by the UN or individual governments to limit trade to specific countries, a popular political weapon in recent years. Example : US participated in embargoes against Iraq, South Africa, Libya, and Vietnam. An embargo, of course, eliminates many potential market opportunities. In contrast, the lifting of trade sanctions, as in the case of South Africa, can release pent-up demand and produce tremendous opportunities. A case in point involves Vietnam, against which the US had a near total economic embargo for 18 years. When the embargo was lifted in February 1994, Boeing, Marriott, Johnson & Johnson, Coca-Cola, Kodak, Du Pont, Kellogg, and American Express initiated efforts to enter the Vietnamese market.
    32. 32.  The competitive environment consists of all the organizations that attempt to serve similar customers.o Brand competitors Nike is a brand competitor of Reebok, LA Gear, and other firms that market different brands of the same types of sport shoes.o Product competitors offer different types of products to satisfy the same general need. Dominos Pizza, McDonalds, and Kentucky Fried Chicken are product competitors. They attempt to satisfy a consumer need for fast food, but they offer somewhat different menus and services.
    33. 33.  Internal Factors External Factors Desired Mode Characteristics
    34. 34.  Firm Size International Experience Product/Service
    35. 35.  More the Size  More the resource availability  Provides basis for increased International Involvement over time For instance SMEs
    36. 36.  Another important factor, refers to the international experience of the managers and thus of the firm Uncertainty in the international markets is reduced through actual operations in the foreign market
    37. 37.  The nature of the product affects channel selection because products vary widely in their characteristics and use For Instance - • Products with high value/weight ratios, such as expensive watches, are typically used for direct exporting. • However soft drinks and beer industry, companies typically establish licensing agreements, or invest in local bottling or production facilities because of high shipment costs.
    38. 38.  Hard services are those where production and consumption can be decoupled. For example software services can be transferred into a CD, or some other tangible medium, which can be mass-produced, making standardization possible. On the other hand Soft Services are those where production and consumption occur simultaneously and decoupling is not viable. The soft-service provider must be present abroad from their first day of foreign operations.
    39. 39.  Sociocultural Distance Country Risk/Demand Uncertainty Market Size and Growth Direct and Indirect Trade Barriers
    40. 40.  The greater the perceived distance between the home and host country in terms of culture, economic systems and business practices, the more likely it is that the firm will shy away from direct investment in favor of joint venture agreements. They’ll prefer entry modes that involve relatively low resource commitments and high flexibility.
    41. 41.  When planning its method of entry the firm must do a risk analysis of both the market and its entry mode. Exchange rate risk is another variable. Risks are not only economic they could be political as well. So when the country risk is high, firms favor entry modes that involve relatively low resource commitments (export modes).
    42. 42.  The larger the country and the size of its market, and the higher the growth rate, the more likely it is that the firms would commit resources & consider establishing a wholly- owned sales subsidiary or participate in a majority-owned joint venture. Small markets, on the other hand, especially if they are geographically isolated and cannot be serviced efficiently from a neighboring country, may not warrant significant attention or resources. Consequently they may be best supplied via exporting or a licensing agreement
    43. 43.  Tariffs or quotas on the import of foreign goods and components is one important factor. Product or trade regulations and standards have an impact on mode of entry and operation decisions. Preferences of local suppliers, or tendencies to ‘buy national’, often encourage companies to consider a joint venture or other contractual arrangements with a local company as the local partner helps in developing local contacts, negotiating sales and establishing distribution channels. In some instances product regulations and standards necessitate significant adaptation and modification so the firm may have to establish local production, assembly or finishing facilities.
    44. 44.  In such a case the market field is subject to the opportunistic behavior of the few export intermediaries, and this will favor the use of hierarchical modes in order to reduce the scope for opportunistic behavior. For Instance -
    45. 45.  Distribution channels in Japan are very different. They are as inefficient as they are complex. The system is characterized by multiple layers of wholesalers who have developed close, personal relationships with other wholesalers, manufacturers, importers, and retailers. Moreover, these intimate relationships often serve as an informal barrier to U.S. companies wishing to sell directly to end-users or retailers.
    46. 46.  Risk Averse Control Flexibility
    47. 47.  If the decision maker is risk averse they will prefer export modes (e.g. indirect and direct exporting) or licensing because they typically entail low levels of financial and management resource commitment. A joint venture provides a way of sharing risk, financial exposure and the cost of establishing local distribution networks and hiring local personnel. However, modes of entry that entail minimal levels of resource commitment and hence minimal risks are unlikely to foster the development of international operations.
    48. 48.  Control is often closely linked to the level of resource commitment. Exporting, provide little or no control over the conditions under which the product or service is marketed abroad. In the case of licensing and contract manufacturing management needs to ensure that production meets its quality standards. Joint ventures also limit the degree of management control over international operations. Wholly-owned subsidiaries provide the most control, but also require a substantial commitment of resources.
    49. 49.  There’s always a flexibility associated with every mode of entry Modes like Wholly owned Subsidiaries (involving substantial equity investment) are typically the most costly but the least flexible and most difficult to change in the short run. Then modes like Contractual Agreements and Joint Ventures limit the firm’s ability to adapt to or change strategy when market conditions are changing rapidly.
    50. 50.  EXPORTING • DIRECT • INDIRECT LICENSING FRANCHISING TURNKEY PROJECTS • WHOLLY OWNED SUBSIDARIES • JOINT VENTURE • STRATEGIC ALLIANCE
    51. 51.  Indirect exports is the process of exporting through domestically based export intermediaries. The exporter has no control over its products in the foreign market.
    52. 52. i) Domestic-based export merchants  Buy the manufacturer’s products and then sell them abroad.ii) Domestic-based export agents  Including trading companies, seek and negotiate foreign purchases for a commission.iii) Cooperative organizations  Carry on exporting activities on behalf of several producers and are partly under their administrative control. They are often used by producers of primary products such as fruits or nuts.iv) Export-management companies  Agree to manage a company’s export activities for a fee.
    53. 53. Advantages Less Investment : The firm does not have to develop an export department, an overseas sales force, or a set of foreign contacts. Low Risk : Because international marketing intermediaries bring know-how and services to the relationship, the seller will normally make fewer mistakes.Disadvantages Little or no control over distribution, sales, marketing, etc. as opposed to direct exporting Wrong choice of market and distributor may lead to inadequate market feedback affecting the international success of the company
    54. 54.  Direct exporting involves selling directly to your target customer in market. This could be from your home country through the internet and regular trade visits, or by setting up a branch, office or company in the target country. Selling directly to customers prevents other businesses taking parts of your margin. However this approach requires a large commitment of financial and human resources. It takes time to make contacts and build relationships, negotiate deals, understand the market and carry out marketing.
    55. 55. Advantages : You are in control of pricing, your brand. You get a direct understanding of buyers or end users needs and an ability to customize accordingly You maintain the customer relationshipDisadvantages : Greater information requirements Longer time-to-market as opposed to indirect exporting
    56. 56.  Is a simple way to engage in international marketing. The licensor issues a license to a foreign company to use a manufacturing process, trademark, patent, trade secret or other item of value for a fee or royalty. The licensor gains entry at little risk ; the licensee gains production expertise or a well known product or brand name.
    57. 57.  The licensor has less control over the licensee than if it had set up its own production and sales facilities. Furthermore, if the licensee is very successful, the company might find that it has created a competitor.
    58. 58.  Now to avoid a situation like this, Coca-Cola usually supplies some proprietary ingredients or components needed in the product But the best strategy is for the licensor to lead in innovation so that the licensee will continue to depend on the licensor.
    59. 59.  Some examples
    60. 60. Companies such as Hyatt and Marriot sell managementcontracts to owners of foreign hotels to manage thesebusinesses for a fee.The management firm may even be given the option topurchase some share in the managed company within astated period.
    61. 61.  The firm hires local manufacturers to produce the product. When Sears opened department stores in Mexico and Spain, it found qualified local manufacturers to produce many of its products.
    62. 62. Advantages :• Definitely there’s chance to start faster.• Less risk• There’s opportunity to form a partnership or buy out the local manufacturer later.Disadvantages :• The company has less control over the manufacturing process• There is loss of potential profits on manufacturing.
    63. 63.  A system in which semi-independent business owners (franchisees) pay fees and royalties to a parent company (franchiser) in return for the right to become identified with its trademark, to sell its products or services, and often to use its business format and system.
    64. 64.  Compared to licensing, franchising agreements tends to be longer and the franchisor offers a broader package of rights and resources which usually includes: equipments, managerial systems, operation manual, initial trainings, site approval and all the support necessary for the franchisee to run its business. A licensing agreement involves things such as intellectual property, trade secrets and others while franchising is limited to trademarks and operating know-how of the business.
    65. 65. Someexamples
    66. 66.  Wholly Owned Subsidiaries(WOS) Joint Venture (JV) Strategic Alliance
    67. 67.  A turnkey project refers to a project in which clients pay contractors to design and construct new facilities and train personnel. A turnkey project is way for a foreign company to export its process and technology to other countries by building a plant in that country Industrial companies that specialize in complex production technologies normally use turnkey projects as an entry strategy
    68. 68. Can be further classified into : Greenfield Investments Acquisitions
    69. 69.  It is the establishment of a new wholly owned subsidiary. It is often complex and potentially costly, but gives full control to the firm and has the most potential to provide above average return. It is preferred where close contact with end customers, high levels of professional skills, specialized know how, and customization are required. Also, its more likely preferred where physical capital intensive plants are planned.
    70. 70.  Some Examples :
    71. 71.  Hyundai Motor Company planned a major greenfield investment in Nošovice in the Moravia-Silesia region of the Czech Republic. They opened a new manufacturing plant to begin operations in October 2008 and employed 3,000 people. Both the Czech government and Hyundai signed an agreement outlining the conditions of this investment. It’s one of the largest investment in the Czech Republic’s modern history. Hyundai also got subsidies amounting to CZK 4.3 billion
    72. 72.  Mercedes Benz began its Indian production in the mid-1990s from a plant based in the small town of Pimpri. In 2007 it acquired 100 acres for a greenfield plant in the Pune, Maharashtra, India. The investment was a whopping Rs. 250 Crores & it took just over a year to be completed. The production capacity could now turn out almost 5000 vehicles, hence reducing the amount of competition Mercedes faced in the Indian market from brands like BMW & Audi. Clearly, this provided a competitive edge. The idea to setup a facility in India to exploit the cheap resources & make use of relatively cheap investment worked very well in favor of the auto-giant. Production started in Q1 of 2009 & has really helped the company in making the presence of its cars felt on the Indian roads.
    73. 73.  Carrefour’s South Korean Investment Riding on its successful retail history, Carrefour chose to venture into a completely different area on its own without a local partner, due to which it failed to understand the market. Although the country in question was South Korea, Carrefour employed most of the top management personnel from France and this did not go down well with local employees. The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers. Although bulk purchases were offered at cheap prices, the research was not done properly. They failed to realize that there weren’t many customers who preferred bulk purchases. As such, in April 2006, Carrefour shut down its operations in South Korea by selling of its stores for an estimated $1.3 billion.
    74. 74.  It has become a popular mode of entering foreign markets mainly due to its quick access. It offers the fastest, and the largest, initial international expansion of any of the alternative. It leads to greater market power and market share is usually affected by market power. Acquisition is lower risk than Greenfield Investment because of the outcomes of an acquisition can be estimated more easily and accurately. In overall, acquisition is attractive if there are well established firms already in operations or competitors want to enter the region.
    75. 75.  Some Examples :
    76. 76.  Volkswagen’s acquisition of Skoda Skoda, set up in the 1895 is one of the oldest car companies in the world. It was a well recognized car brand in the early half of the 1900s after which it lost its value, mainly due to being outdated in terms of technology, quality & unreliability. In 1991, VW took over a part (30%) of Skoda & went about restoring brand’s pride which it enjoyed many decades ago. More than £2 billion was invested in upgrading plants, R&D facilities & training employees to make sure the product meets the quality standards of the targeted markets.
    77. 77.  In 2005, eBay, the multibillion dollar internet auction site decided it was time to purchase Skype for a whopping US$2.6 billion. That seemed a little out of place as Skype generated revenues of around US$60 million. Obviously, the acquisition would have to be justified after paying such a huge bill. Skype is renowned for its free VoIP services enabling members to make free calls over the internet along with paid calls at negligible rates from PC to phones. By the time of its purchase, it was estimated to have almost 54 million subscribers.
    78. 78.  Foreign investors may join with local investors to create a joint venture company in which they share ownership and control. For instance The foreign firm might lack the financial, physical, or managerial resources to undertake the venture alone. The foreign government might require joint ownership as a condition for entry. Even corporate giants need joint ventures to crack the toughest markets
    79. 79.  Coca-Cola and Nestle joined forces to develop the international market for “ready to drink” tea and coffee, which currently sell in significant amounts only in Japan. Procter & Gamble formed a joint venture with its Italian arch- rival Fater to cover babies’ bottoms in the United Kingdom and Italy
    80. 80.  Whirlpool took a 53 percent stake in the Dutch electronics group Philips’s white goods business to leapfrog into the European market. GE Money – views joint ventures as one of its “most powerful strategic tools” . It has formed JVs with financial institutions in S Korea, Spain, Turkey etc.
    81. 81.  It’s a term used to describe a variety of cooperative agreements between different firms, such as shared research, formal joint ventures, or minority equity participation. The modern form of strategic alliances is becoming increasingly popular and has three distinguishing characteristics.
    82. 82.  This is an extensive, far-ranging partnership, bringing together each company’s respective strengths today and extending them ambitiously into the future. The highlight of the partnership is the companies’ commitment to jointly develop and market a suite of next- generation, cloud-based, managed security solutions for enterprise & government customers. It has the potential of providing a secure foundation for the widespread adoption and proliferation of enterprise-class cloud computing.
    83. 83. MARKETING MIX PRODUCT PRICING PLACING PROMOTION
    84. 84. MARKETING MIX PRODUCT PRICING PLACING A company’s customers and competitors PROMOTION are defined by the products it offers. The challenge facing a company with global horizons is to develop product policies and strategies that are sensitive to market needs, competition, and company resources on a global scale.
    85. 85. MARKETING MIX PRODUCT GLOBAL LOCAL PRODUCT PRICING PRODUCT PLACING PROMOTION TYPES OF PRODUCTINTERNATIONAL NATIONAL PRODUCT PRODUCT
    86. 86. MARKETING MIX PRODUCT PRICING PLACING PROMOTION
    87. 87. NATIONAL MARKETING MIXPRODUCT PRODUCT PRICING PLACING PROMOTION
    88. 88. MARKETING MIXINTERNATIONAL PRODUCT PRODUCT PRICING PLACING PROMOTION
    89. 89. MARKETING MIXGLOBAL PRODUCT PRODUCT PRICING PLACING PROMOTION
    90. 90. MARKETING MIX PRODUCT POSITIONING PRODUCT PRICING PLACING Positioning refers to an act of locating a PROMOTION brand in the customers’ mind over and against other products in terms of product attributes and the benefits that a brand does and does not offer.
    91. 91. MARKETING MIXPRODUCT POSITIONING PRODUCT PRICINGATTRIBUTE/BENEFIT PLACING PROMOTIONQUALITY/PRICEUSE/USERHIGH-TECHHIGH-TOUCH
    92. 92. MARKETING MIX ATTRIBUTE/BENEFIT PRODUCT PRICING In global marketing, the fact that a PLACING product is imported itself represents benefit positioning. PROMOTION Economy, reliability and durability are other frequently used attribute/benefit PRODUCT POSITIONING positions. ATTRIBUTE/BENEFIT QUALITY/PRICE USE/USER HIGH-TECH HIGH-TOUCH
    93. 93. MARKETING MIX ATTRIBUTE/BENEFIT PRODUCT PRICINGExample: PLACINGIn the on-going Credit card wars,VISA’s advertising focuses on the PROMOTIONbenefit of worldwide merchantacceptance. PRODUCT POSITIONING ATTRIBUTE/BENEFIT QUALITY/PRICE USE/USER HIGH-TECH HIGH-TOUCH
    94. 94. MARKETING MIX QUALITY/PRICE PRODUCT PRICING PLACING This strategy focuses on providing the customers high fashion/quality goods at PROMOTION a high price rather than providing them the low quality goods at a low price. PRODUCT POSITIONING ATTRIBUTE/BENEFIT QUALITY/PRICE USE/USER HIGH-TECH HIGH-TOUCH
    95. 95. MARKETING MIX QUALITY/PRICE PRODUCT PRICINGExample:The American express card has traditionally PLACINGbeen positioned as an upscale card whose PROMOTIONprestige justifies higher annual fees than aVISA or Master card. The Discover cardpositions itself at the other end by charging no PRODUCT POSITIONINGannual fee and a cash rebate to card holders ATTRIBUTE/BENEFITeach year. QUALITY/PRICE USE/USER HIGH-TECH HIGH-TOUCH
    96. 96. MARKETING MIX USE/USER PRODUCT PRICING PLACING Positioning can also be achieved by describing how a product can be used or PROMOTION by associating a product with a user or class of users the same way in every PRODUCT POSITIONING market. ATTRIBUTE/BENEFIT QUALITY/PRICE USE/USER HIGH-TECH HIGH-TOUCH
    97. 97. MARKETING MIX USE/USER PRODUCT PRICINGExample:Marlboro’s success as a global brand is due PLACINGin part to the product’s association with PROMOTIONcowboys – the archetypal symbol of ruggedindependence, freedom and space.Smoking Marlboro is a way of getting in PRODUCT POSITIONINGtouch with a powerful urge to be free and ATTRIBUTE/BENEFITindependent. Lack of physical space maybe a reflection of the Marlboro user’s own QUALITY/PRICEsense of ‘macho-ness’ or a symbol offreedom and independence. The message USE/USERis reinforced in advertising with an image HIGH-TECHcarefully calculated to appeal to theuniversal human desire for those things HIGH-TOUCHand urges smokers to ‘join that rugged,independent cowboy in the Old West’.
    98. 98. MARKETING MIX HIGH-TECH PRODUCT PRICING There are certain products for which the PLACING buyers wish to acquire considerable PROMOTION technical information. PRODUCT POSITIONING The positioning of the technical products such as Computers, tires, financial ATTRIBUTE/BENEFIT services, adidas and nike sports equipments, fuji bicycles, Canon QUALITY/PRICE cameras, Sega video games, etc. is USE/USER classified under the High-tech positioning which should be informative HIGH-TECH and emphasize features. HIGH-TOUCH
    99. 99. MARKETING MIX HIGH-TECH PRODUCT PRICINGExample: Computerbuyers in Russia and PLACINGthe United States PROMOTIONare equallyknowledgeableabout Pentium PRODUCT POSITIONINGmicroprocessors,hard drives, and ATTRIBUTE/BENEFITRAM requirements. QUALITY/PRICE USE/USER HIGH-TECH HIGH-TOUCH
    100. 100. MARKETING MIX HIGH-TOUCH PRODUCT PRICING PLACING Marketing of high touch products requires less emphasis on the specialized PROMOTION information and more emphasis on the image. PRODUCT POSITIONING ATTRIBUTE/BENEFIT Buyers of such products share a common language and set of symbols relating to QUALITY/PRICE themes of wealth, materialism, and USE/USER romance. HIGH-TECH HIGH-TOUCH
    101. 101. MARKETING MIX HIGH-TOUCH PRODUCT PRICINGExample:The American-ness PLACINGof Levi’s , PROMOTIONMarlboro,McDonald’s andHarley-Davidson PRODUCT POSITIONINGenhances theirappeal to the ATTRIBUTE/BENEFITcosmopolitians QUALITY/PRICEaround the worldand offers USE/USERopportunities for HIGH-TECHbenefit positioning. HIGH-TOUCH
    102. 102. PRODUCT SATURATION MARKETING MIX LEVELS IN MARKET PRODUCT PRICING PLACING The sale of the products in the market does not depend only on the income of PROMOTION the consumers. Other companion factors are also taken into account.
    103. 103. PRODUCT SATURATION MARKETING MIX LEVELS IN MARKET PRODUCT PRICINGExample: PLACING1) The sale of air conditioners is explained by PROMOTIONincome and climate. In a low-income country,many people cannot afford an air conditioner nomatter how hot it is. Affluent people in aNorthern climate can easily afford an airconditioner but have no need for one.
    104. 104. PRODUCT SATURATION MARKETING MIX LEVELS IN MARKET PRODUCT PRICING 2) During the 1960s, the ownership PLACING of vacuum cleaners in the European common market ranged from a high PROMOTION of 95 percent in Netherlands to a low of 7 percent in Italy. An important factor in explaining the ownership levels is the type of floor covering used in the homes of the country. Almost every home in Netherlands contains rugs, whereas in Italy the use of rugs is uncommon.
    105. 105. MARKETING MIX PRODUCT PRICING PLACING PROMOTIONFACTORS AFFECTING PRODUCT DESIGN
    106. 106. MARKETING MIX PRODUCT DESIGN PRODUCT PRICINGPREFERENCES PLACING PROMOTIONCOSTCOMPATABILITYLAWS AND REGULATIONHIGH-TOUCH
    107. 107. MARKETING MIX PREFERENCES PRODUCT PRICING Color PLACING Taste Heavyness PROMOTION Example: Italy’s Olivetti Corporation had gained a considerable distinction for its award-winning PRODUCT DESIGN modern consumer typewriters. But these designs did not enjoy the commercial success in the U.S. The U.S. consumer wanted a heavy, bulky PREFERENCES typewriter that was ugly by the U.S. standards. COST COMPATABILITY LAWS AND REGULATION
    108. 108. MARKETING MIX COST PRODUCT PRICING Design-related costs Labour cost PLACING Repair services PROMOTION Example: British approach – Engine inside the wing. PRODUCT DESIGN Benefits – Less wind resistance and higher fuel economy Disadvantage – Less accessible engines. Higher PREFERENCES time required for maintenance and repair. COST American approach – Hang the engine from the wing COMPATABILITY Benefits – Lesser time required for maintenance and repair LAWS AND Disadvantage – Less efficiency and fuel economy REGULATION REASON: Cost of labor required to repair the engine.
    109. 109. MARKETING MIX COMPATABILITY PRODUCT PRICING Language System PLACING Example: PROMOTION The companies manufacturing the electrical equipments have to take into consideration the power system in the country of use. Three PRODUCT DESIGN different television broadcast systems are found in the world today: the French SECAM PREFERENCES system, the German PAL system and the U.S. COST NTSC system. The companies that are targeting global markets design multisystem TVs that COMPATABILITY allow users to simply flip a switch for proper LAWS AND orientation with any system. Companies that REGULATION do not aim for the global market design products that comply with a single type of technical requirements.
    110. 110. MARKETING MIX LAWS AND REGULATIONS PRODUCT PRICING Compliance with the laws and regulations of PLACING different countries has direct impact on the product design decisions, leading to the PROMOTION adaptations in the design thus increasing the price of the product. PRODUCT DESIGN Example: In the food industry in Europe there were 200 PREFERENCES legal and regulatory barriers (such as prohibitions COST or taxes on products with certain ingredients, and different packaging and labelling laws) to COMPATABILITY cross-border trade within the European-Union in LAWS AND the food categories. REGULATION
    111. 111. MARKETING MIX GEOGRAPHIC EXPANSION PRODUCT PRICING PLACING PRODUCT PROMOTION STANDAR ADAPT NEW D PRODUCT STRAIGHT STANDARD ADAPTATIO EXTENSION NPROMOTIO PRODUCT INVENTIO N N PROMOTIO DUAL N ADAPT ADAPTATIO ADAPTATIO N N
    112. 112. MARKETING MIX STRAIGHT EXTENSION PRODUCT PRICING The straight extension strategy involves PLACING introducing a standard product with the same promotion strategy throughout the PROMOTION world market. By implementing this strategy successfully major savings can be done on market research and product development.
    113. 113. MARKETING MIX STRAIGHT EXTENSION PRODUCT PRICINGExample:When Campbell tried to sell its tomato PLACINGsoup in the UK, it discovered, throughsubstantial losses, that the English prefer PROMOTIONa more bitter taste than Americans.Campbell learned its lesson andsubsequently succeeded in Japan byoffering 7 soup varieties – for example,corn potage – designed specifically forthe Japanese markets. Another exampleof successful extension is Unilever’sOrganic shampoo, which was firstlaunched in Thailand and then its saleswere extended to Bangkok, Paris andvarious other countries. The basicadvertising concept all over the worldhas been ‘Organics – The first ever root-nourishing shampoo’.
    114. 114. MARKETING MIX PROMOTION ADAPTATION PRODUCT PRICING Use of this strategy involves leaving a product PLACING unchanged but fine-tuning promotional activity to take into account the cultural differences PROMOTION between markets. Example: Bi-cycles and motor scooters are examples of products that have been marketed with this approach. They satisfy the recreational needs in the US but serve as the basic need for transportation in many other countries.
    115. 115. MARKETING MIXPRODUCT ADAPTATION PRODUCT PRICING• By modifying only the product a PLACING manufacturer intends to maintain the core product function in different markets. PROMOTION Example: The electrical appliances have to be modified to cope with different electrical voltages in different environmental conditions. Exxon changed the chemical composition of petrol to cope with the extremities of climate, but still used the ‘Put a tiger in your tank’ campaign unchanged around the world.
    116. 116. MARKETING MIX DUAL ADAPTATION PRODUCT PRICING PLACING By adapting both product and promotion for each market the firm is adopting a PROMOTION completely differentiated approach. This strategy is often adopted by firms when it is not in a leadership position and is therefore reacting to the market or following competitors.
    117. 117. MARKETING MIX DUAL ADAPTATION PRODUCT PRICING Example: PLACING Kellogg’s Basmati flakes was specially created to suit Indian tastes, India being PROMOTION a rice-eating country . The advertising campaign was a locally adapted concept based in international positioning.
    118. 118. MARKETING MIX PRODUCT INVENTION PRODUCT PRICING Product invention is the strategy in which the products are specifically developed to meet the PLACING needs of the individual markets. PROMOTION Existing products may be technologically sophisticated to operate in less developed countries, where power supplies may be intermittent and local skills limited. Example: Colgate pursued this strategy in developing Total, a toothpaste brand whose formulation, imagery and ultimate consumer appeal were designed from the ground up to translate across national boundaries.
    119. 119. MARKETING MIX PRICING PRODUCT PRICING In any country, three basic factors determine the boundaries within which the market prices should PLACING be set. PROMOTION The first is product cost, which establishes the price floor, or minimum price. Second, competitive prices for comparable products create a price ceiling, or the upper boundary. Between the lower and the upper boundaries for every product there is an optimum price which is the function of the demand for the product as determined by the willingness and ability of customers to buy. The interplay of these factors is reflected in the pricing policies adopted by the companies.
    120. 120. MARKETING MIX PRICING PRODUCT PRICINGQuestions that arise before the company -- PLACING Should the firm pursue market penetration, market PROMOTION skimming or any other pricing objective? What type of discount or allowance should the company offer its international consumers? Are the firm’s prices likely to be viewed by the host- country government as reasonable or exploitive? Do the target country’s dumping laws pose a problem?
    121. 121. GLOBAL PRICING OBJECTIVES MARKETING MIX AND STRATEGIES PRODUCT PRICING PLACINGMARKET SKIMMING PROMOTIONPENETRATIONPRICINGMARKET HOLDING
    122. 122. MARKETING MIX MARKET SKIMMING PRODUCT PRICING In this strategy a high price is charged to PLACING ‘skim the cream’ from the top end of the market, with the objective of PROMOTION achieving the highest possible contribution in a short time. GLOBAL PRICING OBJECTIVES AND STRATEGIES For a marketer to use this approach the MARKET product has to be unique, and some SKIMMING segments of the market must be willing to pay the high price. PENETRATION PRICING MARKET HOLDING
    123. 123. MARKETING MIX MARKET SKIMMING PRODUCT PRICINGExample: PLACINGWhen Sony first began selling Betamaxvideocassette recorders (VCRs) in the U.S., PROMOTIONit used a skimming strategy. HarveySchein, the then president of Sony of GLOBAL PRICING OBJECTIVESAmerica at that time, recalled the AND STRATEGIESresponse to the $1,295 tag. MARKET SKIMMING PENETRATION PRICING MARKET HOLDING
    124. 124. MARKETING MIX PENETRATION PRICING PRODUCT PRICING A penetration pricing policy is used to PLACING stimulate market growth and capture market shares by deliberately offering PROMOTION products at low prices. GLOBAL PRICING OBJECTIVES This approach requires mass markets, AND STRATEGIES price-sensitive customers and reduction in MARKET unit costs through economies of scale and SKIMMING experience curve effects. PENETRATION PRICING MARKET HOLDING
    125. 125. MARKETING MIX PENETRATION PRICING PRODUCT PRICING Japanese companies have used penetration pricing intensively to gain market share leadership in a PLACING number of markets, such as cars, home PROMOTION entertainment products and electronic components. Example: When Sony developed the portable compact disc GLOBAL PRICING OBJECTIVES AND STRATEGIES player, the cost per unit at initial sales was estimated to exceed $600. Since this was a ‘no-go’ MARKET price in the U.S. and other target markets, the SKIMMING competitors like Akio Morita gained the market share by pricing the unit in the $300 range. PENETRATION PRICING MARKET HOLDING
    126. 126. MARKETING MIX MARKET HOLDING PRODUCT PRICING PLACING The market holding strategy is frequently adopted by the companies that want to PROMOTION maintain their share of the market. In global marketing, currency fluctuations GLOBAL PRICING OBJECTIVES often trigger price adjustments. AND STRATEGIES MARKET If the competitive situation in market SKIMMING countries is price sensitive, manufacturers PENETRATION must absorb the cost of currency PRICING appreciation by accepting lower margins in order to maintain competitive prices in MARKET HOLDING country markets.
    127. 127. MARKETING MIX MARKET HOLDING PRODUCT PRICING Example: IKEA, the Swedish home PLACING furnishing company sourced 50% of its products in the U.S. in 1992, compared PROMOTION with only 10% in 1989. GLOBAL PRICING OBJECTIVES AND STRATEGIES MARKET SKIMMING PENETRATION PRICING MARKET HOLDING
    128. 128. GLOBAL MARKETING CHANNELS AND MARKETING MIX PHYSICAL DISTRIBUTIONS PRODUCT PRICING• Distribution is the physical PLACING flow of goods through channels. PROMOTION• Channels are comprised of coordinated groups of individuals or firms that perform functions adding utility to a product or a  The American Marketing Association defines service. channel of distribution as ‘an organized network of agencies and institutions, which, in combination, perform all the activities required to link producers with users to accomplish the marketing task’.  Hypermarkets like Carrefour and Euromarche are one of the many elements that constitute distribution channels around the globe.
    129. 129. MARKETING CHANNELS - MARKETING MIX PURPOSE PRODUCT PRICING The purpose of the marketing channels is to PLACING create utility for the customers. The major PROMOTION categories of utility are – 1. Place – The availability of a product or service in a location that is convenient to a potential customer 2. Time – The availability of a product or service when desired by a customer. 3. Form – The product is processed, prepared and ready to use when desired by a customer. 4. Information – Answers to questions and general communication about useful product features and benefits are available.
    130. 130. MARKETING CHANNELS - MARKETING MIX PURPOSE PRODUCT PRICINGCoke’s leadership positionin world markets is based PLACINGon its ability to put coke PROMOTION‘within an arm’s reach ofdesire’, which is, inmarketing channelterminology, ‘place utility’. Dell’s rise to number-three position in the world computer industry is based on its innovative channel strategy: Direct marketing and Build to Order (BTO) i.e. build the computers with exact configurations as ordered by the customers.
    131. 131. SELECTION OF CHANNEL MARKETING MIX DECISIONS PRODUCT PRICING Some of the questions which help the company to PLACING identify its channel arrangement may be – PROMOTION 1. Where are the potential customers located? 2. What are their information requirements? 3. What are their preference for service? 4. How sensitive are they to price?
    132. 132. FACTORS CONSTRAINING THE SELECTION MARKETING MIX OF SHAPING INTERNATIONAL CHANNELS PRODUCT PRICING CUSTOMER CHARACTERISTICS PLACING PROMOTION PRODUCT CHARACTERISTICS MIDDLEMAN CHARACTERISTICS ENVIRONMENTAL CHARACTERISTICS
    133. 133. MARKETING MIX CUSTOMER CHARACTERISTICS PRODUCT PRICING The number of customers, geographic distribution, income, shopping habits and PLACING reactions to different selling methods all PROMOTION vary from country to country and therefore require different channel FACTORS CONSTRAINING THE SELECTION OF SHAPING approaches. INTERNATIONAL CHANNELS CUSTOMER EXAMPLE: CHARACTERISTICS If there are only 10 customers for an industrial product in each national market, PRODUCT CHARACTERISTICS these 10 customers must be directly contacted by either the manufacturer or MIDDLEMAN CHARACTERISTICS an agent. For mass-market products bought by millions of customers, retail ENVIRONMENTAL CHARACTERISTICS distribution outlets or mail-order distribution is required.
    134. 134. MARKETING MIX PRODUCT CHARACTERISTICS PRODUCT PRICING Certain product attributes such as standardization, perishability, bulk, service PLACING requirements and unit price have an PROMOTION important influence on channel design and strategy. FACTORS CONSTRAINING THE SELECTION OF SHAPING INTERNATIONAL CHANNELS Example: Products with a high unit price are sold CUSTOMER CHARACTERISTICS through a company sales force because the selling cost of this expensive distribution PRODUCT CHARACTERISTICS method is a small part of the total sale price. Moreover, the high cost of such products is MIDDLEMAN usually associated with complexity or product CHARACTERISTICS features that must be explained in some ENVIRONMENTAL detail and this can be done most effectively CHARACTERISTICS by a controlled sales force.
    135. 135. MARKETING MIXPRODUCT CHARACTERISTICS PRODUCT PRICINGExample: PLACINGMainframe computers are expensive, PROMOTIONcomplicated products that require bothexplanation and applications analysis FACTORS CONSTRAINING THEfocused on the customer’s needs. A SELECTION OF SHAPING INTERNATIONAL CHANNELScompany-trained sales-person or a sales- CUSTOMERengineer is well suited to the task of CHARACTERISTICScreating information utility for the PRODUCTcomputer buyers. CHARACTERISTICS MIDDLEMAN CHARACTERISTICS ENVIRONMENTAL CHARACTERISTICS
    136. 136. MARKETING MIXMIDDLEMAN CHARACTERISTICS PRODUCT PRICING Middlemen are in business to maximize PLACING their own profit and not of the PROMOTION manufacturer. FACTORS CONSTRAINING THE SELECTION OF SHAPING They have a tendency of taking orders from INTERNATIONAL CHANNELS the manufacturers whose products and brands are in demand to avoid any real CUSTOMER CHARACTERISTICS selling effort for a manufacturer’s products that may require push. PRODUCT CHARACTERISTICS MIDDLEMAN CHARACTERISTICS ENVIRONMENTAL CHARACTERISTICS
    137. 137. MARKETING MIXMIDDLEMAN CHARACTERISTICS PRODUCT PRICINGExample:The RF division of Harris achieved a great PLACINGsuccess in international market with its PROMOTIONshortwave radios. One of the reasons forits success was the quality of agents in key FACTORS CONSTRAINING THE SELECTION OF SHAPINGmarkets and their commitment to the INTERNATIONAL CHANNELSHarris product. Also Harris offered CUSTOMERcommissions of 33 percent on all sales – at CHARACTERISTICSleast 15 percent higher than commissions PRODUCToffered by any other competitor. CHARACTERISTICS MIDDLEMAN CHARACTERISTICS ENVIRONMENTAL CHARACTERISTICS
    138. 138. ENVIRONMENTAL MARKETING MIX CHARACTERISTICS PRODUCT PRICING The variety of economic, social and political environments internationally, create a need to PLACING delegate a large degree of independence to local PROMOTION operating management or agents. Example: FACTORS CONSTRAINING THE In the U.S., several factors combine to make the SELECTION OF SHAPING supermarket or the self-service, one-stop food INTERNATIONAL CHANNELS store the basic food retailing unit. These factors CUSTOMER include high incomes, large capacity CHARACTERISTICS refrigerator/freezer units, automobile ownership, acceptance of frozen and convenience foods and PRODUCT attitude toward food preparation. Many shoppers CHARACTERISTICS want to purchase a week’s worth of groceries in MIDDLEMAN one trip to the store. They have money, ample CHARACTERISTICS storage space in the refrigerator and hauling capacity of the car to move this large quantity of ENVIRONMENTAL food from the store to the home. CHARACTERISTICS
    139. 139. MARKETING MIX DISTRIBUTION CHANNELS PRODUCT PRICING PLACING Distribution blocks are the links that link the manufacturers to the customers. PROMOTION Consumer channels are designed to put the products in the hands of the people for their own use. Industrial channels deliver the products to the manufacturers or the organizations that use them in the production process or in day-to-day operations.
    140. 140. MARKETING MIXDISTRIBUTION CHANNELS PRODUCT PRICING PLACINGCONSUMER PRODUCTS PROMOTIONINDUSTRIAL PRODUCTSGLOBAL RETAILING
    141. 141. MARKETING MIX CONSUMER PRODUCTS PRODUCT PRICING A consumer products manufacturer can PLACING sell to customers directly, through mail- order selling, through manufacturer- PROMOTION owned or independent retailers, or the internet. Example: DISTRIBUTION IKEA, the world’s largest furniture CHANNELS retailer, relies primarily on its CONSUMER company-owned retail stores, but it PRODUCTS also has a catalog that supports both INDUSTRIAL the retail stores and the expanding PRODUCTS on-line store as well as direct mail- GLOBAL RETAILING order selling.
    142. 142. MARKETING MIX INDUSTRIAL PRODUCTS PRODUCT PRICING PLACING SCAN IMAGE PROMOTION DISTRIBUTION Before deciding which pattern to use and CHANNELS which wholesalers and agents to select, CONSUMER managers must study each country individually. PRODUCTS INDUSTRIAL PRODUCTS GLOBAL RETAILING
    143. 143. MARKETING MIX INDUSTRIAL PRODUCTS PRODUCT PRICINGExample: PLACINGKyocera Corporation of Kyoto, Japan, hassuccessfully used its own sales force at home PROMOTIONand in the U.S. to achieve leadership in the$1.2 billion global market for certain ceramicmicrochip covers. DISTRIBUTION CHANNELS CONSUMER PRODUCTS INDUSTRIAL PRODUCTS GLOBAL RETAILING
    144. 144. MARKETING MIX GLOBAL RETAILING PRODUCT Global retailing is any retailing activity PRICING that crosses national boundaries. PLACING Retail stores can be divided into PROMOTION categories according to the amount of square feet of floor space, the level of service offered, and width and depth of product offerings. A variety of terms used to refer large stores are – Hypermarkets, mass DISTRIBUTION CHANNELS merchandisers, discounters, supermarkets and superstores. CONSUMER PRODUCTS The critical question for the would-be INDUSTRIAL international retailer is ‘What profit do PRODUCTS we have relative to the local GLOBAL RETAILING competition?’
    145. 145. MARKETING MIX GLOBAL RETAILING PRODUCT PRICING Basically, a retailer has two things to offer PLACING to the consumers – One is the selection of goods at a price, and the second is the PROMOTION overall manner in which the goods are offered in the store setting. This includes such things as the store site, parking facilities, in-store setting and the customer service. DISTRIBUTION One of the important aspects of global CHANNELS retailing is the ability to develop an CONSUMER environment that invites the customer to PRODUCTS the shop. INDUSTRIAL PRODUCTS Example: In Istanbul, Turkey, a visiting team GLOBAL noted that one store featured lingerie next RETAILING to plumbing equipment.
    146. 146. CHANNEL STRATEGY FOR NEW MARKETING MIX MARKET ENTRY PRODUCT PRICING The company entering a market for the PLACING first time uses either the established channels or builds its own channels. PROMOTION There is little immediate incentive for an independent channel agent to take on a new product when established names are accepted in the market and are satisfying current demands. The global company seeking to enter such a market must either provide some incentive to channel agents or establish its own direct-distribution system.
    147. 147. CHANNEL STRATEGY FOR NEW MARKETING MIX MARKET ENTRY PRODUCT PRICING By using a sales force, the manufacturer can ensure aggressive sales activity and attention to its products. PLACING PROMOTION Sufficient resource commitment to sales activity, backed up by appropriate communications programs, may in time allow a manufacturer with competitive products and prices to obtain a reasonable share of the market. When market share objectives have been reached, the manufacturer may consider shifting from the direct sales force to reliance on independent intermediaries. This shift becomes a possibility when market share and market recognition make the manufacturer’s brand attractive to independent intermediaries.
    148. 148. CHANNEL STRATEGY FOR NEW MARKETING MIX MARKET ENTRY PRODUCT PRICING PLACING PROMOTIONExample:Kyocera achieved great success in the U.S. market by custom-tailoringceramic chip housings to each customer’s needs. Kyocera also has becomelegendary for its service among California’s Silicon Valley chipmakers.Instead of following the electronics industry norm of using distributors forits products, Kyocera relies on a salaried sales force. Kyocera backs up its$100 million-per-year research and development (R&D) expenditures withsales forces in both the U.S. – 50 direct salespersons at 12 direct salesoffices – and Japan that place unwavering emphasis on quality andcustomer service. Early on, Kyocera earned a reputation for answeringcustomer questions overnight, whereas American suppliers often tookweeks to respond. Employees would work around the clock to satisfycustomer requests for samples.
    149. 149. MARKETING MIX PRODUCT PRICING The promotion P of the marketing mix refers to all forms of communication used by the organization PLACING to inform, remind, explain, persuade and influence PROMOTION the attitudes and buying behavior of the customers. The primary purpose of marketing communications is to tell customers about the benefits and values that a product or service offers. Advertising Direct Public marketing relations Sales Personal promotion selling
    150. 150. MARKETING MIX PRODUCT PRICING Advertising may be defined as any PLACING sponsored, paid message placed in a PROMOTION mass medium. Global advertising is the use of the same appeals in multiple-country markets. Advertising Direct Public marketing relations Sales Personal promotion selling
    151. 151. MARKETING MIX PRODUCT PRICING Global campaigns attest to PLACING management’s conviction that unified PROMOTION themes not only spur short-term sales but also help build long term product identity and offer significant savings in production costs. Advertising Global advertising also offers companies Direct marketing Public relations economies of scale in advertising as well as improved access to distribution Sales Personal channels. promotion selling
    152. 152. Coca-Cola, the most global brand in the world, MARKETING MIXrecords radio spots in 40 languages with 140 PRODUCTdifferent music backgrounds. Coca-Cola asserts thatconsumers still differ from country to countryand PRICINGmust reach by advertising tailored to their respective PLACINGcountries. PROMOTION Advertising Direct Public marketing relations Sales Personal promotion selling
    153. 153. MARKETING MIX PRODUCT PRICINGA company’s public relations (PR) effort PLACING should foster goodwill and PROMOTION understanding among constituents both inside and outside the company. Public relations practices in specific countries can be affected by cultural Advertising traditions, social and political contexts, Direct marketing Public relations and economic environments. Sales Personal promotion selling
    154. 154. MARKETING MIX PRODUCT PRICING In 1994, intel showed a poor understanding of public relations basics after a college professor PLACING discovered a technical defect in the company’s flagship Pentium chip. The professor, contacted PROMOTION intel and asked for a replacement, but his request was rejected. Word about the intel flaw spread quickly through internet. After weeks of negative publicity around the world. Intel finally announced that new Pentium chips would be available to Advertising anyone who requested them. Direct Public marketing relations Sales Personal promotion selling
    155. 155. MARKETING MIX PRODUCT PRICING Personal selling is a two-way, personal communication between a company PLACING representative and a potential customer as well PROMOTION as back to the company. The salesperson’s job is to correctly understand the buyer’s needs, match those needs to the company’s product(s), and then persuade the Advertising customer to buy. Effective personal selling in a salesperson’s home Direct marketing Public relations country requires building a relationship with the customer, global marketing presents additional challenges because the buyer and seller may Sales promotion Personal selling come from different nationalities and backgrounds.

    ×