1. INTERNATIONAL
MARKETING
Miatto Francesca
Poojara Shaumil
Triantafylli Ioanna

2. France
Belgium
French-Speaking
Africa

3. 1
2
In 2007 a new skincare
cream, the Nutrifying Complex
Crème Riva, was developed by
the US R&D team. This new
cream was patent protected.
In February 2009 Riva Belgium
was licensed to sell the cream
in Belgium and France.
Consumers liked the product
and the good quality-price
ratio.
✔

4. 3
4
In January 2012 Riva UK Ltd
started producing the same
cream, but positioned itself
as a premium product.
In August 2012 deliveries
dropped towards English
distributors. Deliveries
steadily diverged from sales.
• Highly priced
• Supported by
heavy advertising
and promotional
expenses

5. 5
In November 2012 Mrs
Gain, Marketing Director in
Riva Belgium, is worried
about the difference between
the production of the cream in
Belgium and sales in Belgium
and France (20% lower).
No signs of excess inventories
in the distribution channels.
Where are the produced
creams??

6. 7
Mrs Gain talks about the
problem with the Belgian CEO,
Mr Graff. He underestimates
the problem!
6
Mrs Gain calls an external auditor
to analyse the situation.
His findings:
• There is an actual problem
• No signs of excess inventories
• Deviations are associated with
deliveries towards 2 wholesalers
Mr Graff receives confidential note
from UK’s CEO: A “Made in
Belgium” box was seen here!
8

7. The company is facing
PARALLEL IMPORTS problems.
Lower sales in Belgium
correspond exactly to UK’s drop
in deliveries.
How is that
possible??
Belgian wholesalers are selling
to UK wholesalers at 15% below
the UK company price!
I would try to solve the
problem with a new
international pricing strategy.

8.  Parallel markets are two or more markets where the
product, produced by the same company, is sold at different prices.
same
 Parallel markets are based on the principle of arbitrage, the practice of
buying a product at a low price in one market and selling it at a higher price
in another market.
 Parallel markets are open, legal, and regulated market exchanges.
Example of a Parallel Market:
Pharmaceutical products are often sold in parallel markets, due to differences
in government-dictated prices.

9.  Greece had the 5th lowest pharmaceutical
prices in the EU in 2005  In
2001, GlaxoSmithKline, in an attempt to stop
parallel trading causing shortages in
Greece, stopped supplying certain drugs to
Greek wholesalers.
 Spain
had
the
7th
lowest

In
Spain, GlaxoSmithKline, Pfizer, and Novartis have
set up a dual pricing scheme to solve delivery
problems that affected spanish pharmacies.

10.  In Europe, where there is close proximity, few trade barriers and companies
are free to set their own prices, consumers will often travel to the lowestpriced country in the EU and purchase large quantities of drugs.
 According to a report released by the European Federation of Pharmaceutical
Industries and Associations (EFPIA) in 2008, the value of parallel trade across
the EU was estimated at $5.7 billion in 2006.
 To combat the problem, drug companies are considering limiting supplies to
an amount equal to the estimated demand in each country.

11. 1. What are the reasons for these parallel import problems?
2. What can be done to stop wholesalers exporting to the UK?
3. Is it necessary to change the marketing strategy of Nutrifying Complex
Crème Riva, particularly its price? If so, where and how should it be
implemented?
4. How should one organize a coordinated international marketing
strategy across national markets? Prepare the report requested by Graff.