4. International Product Life Cycle (cont.)
Export strength is evident by innovator country:
(Introduction)
The product is innovated in the developed countries because they possess
the resources to do so. The firms have the technological know how and
sufficient capital to invest on the research and development activities. The
need of adaptation and modification also forces the production activities
to be located near the market to respond quickly to the changes.
(Standardization or Adaptation)
5. International Product Life Cycle (cont.)
Foreign production starts: (Growth)
The importing firms in the middle income country realise the demand
potential of the product in the home market. The manufacturers also
become familiar in producing the goods. The growing demand of the
products attracts the attention of many firms. They are tempted to start
production in their country and gradually start exporting to the low
income countries.
6. International Product Life Cycle (cont.)
Foreign production becomes competitive in export
market : (Maturity)
The firms in low income country also realize the demand potential in the
domestic market. They start producing the products in their home country
by exploiting cheap labor. They gain expertise in manufacturing the
commodity.
7. International Product Life Cycle (cont.)
Import Competition begins (Decline):
The producers in the low income importing country gain sufficient
experience in producing and marketing the products. They attain the
economies of scale and gradually become more efficient than the
innovator country.
8. International Product Policy
A firm's product policy reflects its marketing orientation.
Following the framework of International Product Life Cycle, a
firm may begin exporting the products it sells in the domestic
market. Alternatively, it may recognize the significant
differences in customer needs, conditions of product use, etc.,
and may plan for exporting different products or product
versions to meet the specific needs of each of its different
global market segments. In the latter case, the exporting firm
would thus offer a large product mix.
9. Standardization
Standardization means an undifferentiated use of the same Marketing Mix
(4-7Ps) in all countries. In this case, the firm simply replicates, without any
changes, the same strategy in the different markets in which it operates. In
general, firms that adopt the standardization strategy are those that are
exporting for the first time, or those that focus on cost savings through
economies of scale and for whom an adaptation process could result very
costly.
10. Adaptation
Adaptation means that each country/market has its Marketing Mix. The
adaptation strategy is geared towards meeting the needs of the market,
planning all business activities with the aim of efficiently meeting the
specific needs and respecting the values of local consumers. We can take
as an example beer companies. When entering a new market we can see
that one country can prefer non-alcoholic beer. The company then has to
adapt to the situation and, for instance, decide to produce more beer
which results preferable for the chosen country/market.
14. International Approach to Marketing
Segmentation
Macro Segmentation
Dividing the market into subgroups based on overall characteristics of the
prospect organization. It identifies clusters of countries that demand
similar products. e.g. Geographic and Demographic Segmentation
Micro Segmentation
Dividing the market in to subgroups based on specific characteristics of
the decision-making process and buying structure of the prospect
organization, e.g. Psychographic and Behavioral Segmentation
15. Influences on Marketing Plan and
Budget
Internal Influences
Finances: This includes your profit objectives, your marketing budget, and your expectations for
a return on the money you spend.
Governance: This covers the guidelines that determine what your company can and cannot do.
It can include legal restrictions on what you can say in your advertising, how much you can
charge for your products, or policies set out by the board of directors.
Ethics and Culture: This is often unspoken in a small business, but every company has its own
culture based on shared values of the owners, managers and employees that affect how things
are done.
Pricing: The pricing strategy portion of the marketing plan involves determining how you will
price your product or service. Finding the ideal price means choosing a pricing strategy that’s
appropriate for your company’s circumstances.
16. Influences on Marketing Plan and
Budget
External Influences
Economic environment :The key factor in determining demand. E.g. many marketing objectives have been thwarted or
changed as a result of the recession. Factors such as exchange rates would also impact objectives concerned with
international marketing.
Competitor actions: Marketing objectives have to take account of likely / possible competitor response. E.g. an objective
of increasing market share by definition means that competitor response will not be effective
Market dynamics :The key market dynamics are market size, growth and segmentation. Changes in any of these
undoubtedly influence marketing objectives. A market whose growth slows is less likely to support an objective of
significant revenue growth or new product development
Technological change: Consumer and other markets are now affected by rapid technological change, shortening product
life cycles and creating great opportunities for innovation. These have to be taken into account when setting marketing
objectives.
Social & political change: Changes to legislation may create or prevent marketing opportunities. Change in the structure
and attitudes of society also have major implications for many markets.
17. International Services Marketing
Services are intangible products generally delivered through interactive channels. They are
offered either as primary products or as supplementary components. For example, legal
counseling is a primary service while computer networking is complimentary.
International service marketing looks to create awareness of new and existing services in
the target markets and public domains of foreign countries.
Social Media platforms such as Facebook, Twitter, and Instagram are the few examples of
services that are used internationally.
International Networks
Service businesses that build and maintain international networks build close relationships
with customers. This allows them to raise sales while expanding their market presence
abroad. Taking advantage of Internet-based promotional and networking platforms, such as
social media, lets them reap maximum benefits in market penetration strategies. Digital
platforms are particularly useful for small and medium-size service companies engaging in
international promotion because they are fairly affordable and easily accessible.
18. International Services Marketing
Promoting Differentiation
International service marketing is an important platform for brand
differentiation among service companies offering similar and related products
in foreign markets. Indeed, brand recognition enables service companies to
stand out and remain competitive. That makes promotional campaigns that
engages the audience while establishing brand awareness as critical as the
investment required to operate on an international basis.
19. Conclusion
International product policy and planning plays a crucial role in the
successful management of international marketing operations.
Aimed at seizing the market opportunity, it focuses on the basic
decision of whether to export the domestic standardized product or
to adapt or even develop a new product for the global markets.
Although global marketing of the standardized product is more
convenient and profitable, yet customer needs, competitive
pressures and legal considerations require the product to be
adapted-to even the newly developed needs.
Implementation of the product policy requires planning of the
width and depth of the product-mix.
