This document discusses global marketing and R&D strategies. It covers several learning objectives related to varying marketing mix elements like products, pricing, distribution and communications across different countries. Some key points discussed are why product attributes, pricing and distribution strategies need to vary based on factors like cultural differences, economic development levels and regulations across nations. It also talks about how to configure the overall marketing mix globally and the importance of international market research. Globalization is affecting product development by integrating R&D, marketing and manufacturing functions across borders.

1. Global Marketing and
R&D

2. Learning Objectives 1 of 2
LO 18-1 Explain why it might make sense to vary the attributes of a product
from country to country.
LO 18-2 Recognize why and how a firm’s distribution strategy might vary
among countries.
LO 18-3 Identify why and how advertising and promotional strategies might
vary among countries.
LO 18-4 Explain why and how a firm’s pricing strategy might vary among
countries.
2

3. Learning Objectives 2 of 2
LO 18-5 Understand how to configure the marketing mix
globally.
LO 18-6 Understand the importance of
international market research.
LO 18-7 Describe how globalization is affecting product
development.
3

4. Introduction
Mass producing a standardized output:
● Allows a firm to realize substantial unit cost reductions from experience
curve effects and other economies of scale
However:
● Ignoring country differences in consumer tastes and preferences can lead
to failure
There is a link between marketing and R&D
● Marketing mix – product, price, promotion, and place

5. “
Globalization of Markets and Brands
5
Theodore Levitt’s HBR article
● Importance of technology in globalization
● Fewer differences in national and regional
preferences
● Global corporations sell the same things the
same way.
● Leads to standardization of products,
manufacturing, trade and commerce
Is Levitt right?

6. Market Segmentation 1 of 2
Markets are segmented by:
▪ Geography
▪ Demography
▪ Sociocultural factors
▪ Psychological factors
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7. Market Segmentation 2 of 2
Issues for marketing managers:
▪ Differences between countries in the structure of market
segments
▪ Existence of segments that transcend national borders
▫ Intermarket segment
▫ Enhances the ability of an international business to view
the global marketplace as a single entity and pursue a
global strategy
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8. Product Attributes 1 of 3
8
Learning Objective 18-1 Explain why it might make sense to vary the attributes of a product
from country to country.
Cultural Differences
● Social structure, language, religion, education, others
● Tastes and preferences are becoming more cosmopolitan.

9. Product Attributes 2 of 3
Economic Development
● Consumer behavior is influenced by the level of economic
development of a country.
● Consumers in the most developed countries are often not
willing to sacrifice their preferred attributes for lower prices.
● Consumers in the most advanced countries are willing to pay
more for products that have additional features and attributes
customized to their tastes and preferences.
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10. Product Attributes 3 of 3
10
Product and Technical Standards
● Regional trade agreements may
influence certain regional markets to
become more globalized.
● Differing government-mandated
product standards can often result
in companies ruling out mass
production and marketing of a fully
global and standardized product.
● Differences in technical standards
also constrain the globalization of
markets.

11. 11
Distribution
Strategy 1 of 5
Learning Objective 18-2 Recognize why and how a firm's
distribution strategy might vary among countries.
Typical Distribution System
● Channel with a wholesale distributor and a
retailer
● Firm may also sell directly to the consumer, to
the retailer, or to the wholesaler
● Firm may sell to an import agent who then
deals with the wholesale distributor, the
retailer, or the consumer

12. Figure 18.1 A typical distribution system
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13. Distribution Strategy 2 of 5
13
Differences between Countries
● Retail Concentration
○ Concentrated retail system
■ Greater in developed countries because of car
ownership, number of households with
refrigerators and freezers, and number of two-
income households
○ Fragmented retail system
■ More common in developing countries because of
geography and road conditions

14. Distribution Strategy 3 of 5
14
Differences between Countries continued
● Channel length
○ Producer to consumer = short channel
○ Producer sells through import agent, wholesaler,
and retailer = long channel
■ Countries with fragmented retail systems
also tend to have long channels of
distribution.
○ Large discount superstores shorten channel
length.

15. Distribution Strategy 4 of 5
15
Differences between Countries continued
● Channel exclusivity
○ Varies among countries (ex. Japan is very exclusive)
● Channel quality
○ Not consistent in emerging markets and less developed
nations
○ May impede market entry

16. Distribution Strategy 5 of 5
16
Choosing a Distribution Strategy
● Determined by relative costs and benefits of retail
concentration, channel length, channel exclusivity,
and channel quality
● Link between channel length, final selling price, and
profit margin
● A longer channel cuts selling costs when the retail
sector is very fragmented and provides access to
an exclusive channel.

17. Communication Strategy 1 of 10
17
Learning Objective 18-3 Identify why and how advertising and promotional strategies
might vary among countries.
Barriers to International Communication
● Cultural barriers
○ Make it difficult to communicate messages
○ Need to develop cross-cultural literacy
○ Use local input in developing the marketing message

18. Communication Strategy 2 of 10
Barriers to International Communicationcontinued
▪ Source and country of origin effects
▫ Source effects can be damaging when there is bias
against foreign firms.
▫ Country of origin effects
▫ Consumer may use country of origin as a cue when
evaluating a product
▫ Use promotional messages that stress the positive
performance attributes of the product
▫ Not always negative
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19. Communication Strategy 3 of 10 19
Barriers to International Communicationcontinued
● Noise levels
○ High in highly developed countries
○ Lower in developing countries because there are
fewer firms competing for attention

20. 20
Communication Strategy 4 of 10
Push versus Pull Strategies
● Push strategy emphasizes personal selling.
○ Costly
● Pull strategy depends more on mass media advertising.
● Choice is determined by:
○ Consumer sophistication
○ Channel length
○ Media availability

21. 21
Communication Strategy 5 of 10
Push versus Pull Strategiescontinued
● Product Type and Consumer Sophistication
○ Consumer goods usually use pull strategy,
except in nations with poor literacy rates.
○ Industrial products or complex products
favor a push strategy.

22. 22
Communication Strategy 6 of 10
Push versus Pull Strategiescontinued
● Channel Length
○ The longer the distribution channel, the more
intermediaries.
■ Can lead to inertia in the channel
■ Direct selling can be expensive.

23. 23
Communication Strategy 7 of 10
Push versus Pull Strategies continued
▪ Media Availability
▫ A pull strategy relies on access to advertising media.
▫ In developed countries, advertising is focused.
▫ In developing countries, there are fewer forms of mass
media.
▫ Use of pull strategy is limited
▫ Media availability may be limited by law.

24. Communication Strategy 8 of 10
Push versus Pull Strategies continued
▪ The Push-Pull Mix
▫ Push strategies
▫ For industrial products or complex new products
▫ When distribution channels are short
▫ When few print or electronic media are available
▫ Pull strategies
▫ For consumer goods
▫ When distribution channels are long
▫ When sufficient print and electronic media are
available to carry the marketing message
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25. Communication Strategy 9 of 10
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Global Advertising
● For standardized advertising
○ Economic advantages
○ Shortage of creative talent
○ Global brand names
● Against standardized advertising
○ Cultural differences
○ Advertising regulations

26. Communication Strategy 10 of 10
Global Advertising continued
▪ Dealing with country differences
▫ A firm may select some features to include in all its
advertising campaigns and localize other features.
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27. Pricing Strategy 1 of 5
27
Learning Objective 18-4 Explain why and how a firm’s pricing strategy might vary
among countries.
Price Discrimination
● Charging what the market will bear
● Helps maximize profits
● National markets must be kept separate.
● Price elasticity of demand
○ Elasticity is greater in countries with low income levels
and where there is more competition.
○ Inelastic demand

28. 28
Figure 18.2 Elastic and inelastic demand curves

29. Pricing Strategy 2 of 5
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Strategic Pricing
● Predatory pricing
○ Use aggressive pricing to drive out competitors and then
raise prices and operate in a monopoly position
○ Requires the firms to have a profitable position in
another market to subsidize the aggressive pricing
process
● Multipoint pricing strategy
○ Two or more international businesses compete against
each other in two or more national markets
○ Pricing can be aggressive, eliciting a competitive
response

30. Pricing Strategy 3 of 5
30
Strategic Pricing continued
● Experience curve pricing
○ Price low worldwide in attempt to build global sales
volume as rapidly as possible, even at a loss
○ Take profits later after moving down the experience curve

31. Pricing Strategy 4 of 5
Regulatory Influences on Prices
▪ Antidumping regulations
▫ Ambiguity in definition of dumping
▫ Set a floor under export prices and limit firms’ ability to
pursue strategic pricing
31

32. Regulatory Influences on Prices continued
▪ Competition policy
▫ Designed to promote competition and to restrict
monopoly practices
▫ Can be used to limit the prices a firm can charge in a given
country
Pricing Strategy 5 of 5
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33. Configuring the Marketing Mix
33
Learning Objective 18-5 Understand how to configure the marketing mix globally.
Marketing mix may vary according to:
● Local differences in culture
● Economic conditions
● Competitive conditions
● Product and technical standards
● Distribution systems
● Government regulations
● Etc.

34. Table 18.1 Questions to Address to Configure the Marketing
Mix 1 of 6
34
Sample Questions to Address
● Product strategy
○ Product core: Do the customers have similar product
needs across international market segments?
○ Product adoption: How is the product bought by
customers in the international market segments
targeted?
○ Product management: How are established products
versus new products managed for customers in the
international market segments?
○ Product branding: What is the perception of the
product brand by customers in the international market
segments?

35. Table 18.1 Questions to Address to Configure the
Marketing Mix 2 of 6
35
Sample Questions to Address continued
● Distribution strategy
○ Distribution channels: Where is the product
typically bought by customers in the international
market segments?
○ Wholesale distribution: What is the role of
wholesalers for the international market segments
targeted?
○ Retail distribution: What is the availability of
different types of retail stores in the international
markets for the customer segments targeted?

36. Sample Questions to Address continued
▪ Communication strategy
▫ Advertising: How is product awareness created for a
product to reach customers in the international market
segments targeted?
▫ Publicity: What role does publicity (e.g., public relations)
play among customers in the international market segments
targeted?
▫ Mass media: What role do various media (e.g., TV, radio,
newspapers, magazines, billboards) have in reaching
customers in the international market segments targeted? 36
Table 18.1 Questions to Address to Configure the
Marketing Mix 3 of 6

37. Table 18.1 Questions to Address to Configure the
Marketing Mix 4 of 6
37
Sample Questions to Address continued
● Communication strategy continued
○ Social media: What role do various social media (e.g.,
Facebook, Twitter, blogs, virtual communities), mainly
focused on user-generated content, have in
communicating with customers in the international
market segments targeted?
○ Sales promotion: Are rebates, coupons, and other sale
offers a widespread activity to motivate customers in
the international market segments targeted to buy a
company’s products?

38. Table 18.1 Questions to Address to Configure the
Marketing Mix 5 of 6
38
Sample Questions to Address continued
● Pricing strategy
○ Value: Is the price of a product critical to the customer’s
understanding (or perception) of the value of the product
itself among customers in the international market
segments?
○ Demand: Is the demand for the product among customers
in the international market segments targeted similar to
domestic demands?

39. Sample Questions to Address continued
▪ Pricing strategy continued
▫ Costs: Are the fixed and variable costs of the product the
same when targeting customers in the international market
segments (e.g., are there variable costs that change
significantly when going international)?
▫ Retail price: Are there trade tariffs, nontariff barriers,
and/or other regulatory influences on price that will
influence the pricing equation used to determine the retail
price to customers in the international market segments?
39
Table 18.1 Questions to Address to Configure the
Marketing Mix 6 of 6

40. International Market Research 1 of 7
Learning Objective 18-6 Understand the importance of international market research.
International Marketing Research
▪ Involves:
▫ All the issues of domestic marketing research
▫ Translation of questionnaires and reports into appropriate
foreign languages
▫ Accounting for cultural and environmental differences in
data collection
▪ Global companies often have an in-house department
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41. International Market Research 2 of 7
41
Customer-Satisfaction Companies
● J.D. Power
● CFI Group
International Market Research Firms
● Nielsen
● Kantar
● Ipsos
● NPD Group

42. International Market Research 3 of 7 42
Data Collected
● Data on the country and potential market segments
(geography, demography, sociocultural factors, and
psychological factors)
● Data to forecast customer demands within specific country
or world region (social, economic, consumer, and industry
trends)
● Data to make marketing mix decisions (product,
distribution, communication, and price)

43. International Market Research 4 of 7
43
The Process
1. Defining the research objectives
2. Determining the data sources
3. Assessing the costs and benefits of the research
4. Collecting the data
5. Analyzing and interpreting the research
6. Reporting the research findings

44. Figure 18.3 International market research steps
44

45. International Market Research 5 of 7 45
Defining the Research Objectives
● Defining the research problem
○ Setting objectives for the international market
research
● Determining the Data Sources
○ Primary data
○ Secondary data
● Assessing Costs and Benefits
○ Primary data is more costly.
■ Survey development and sampling frame
issues

46. International Market Research 6 of 7
46
Collecting the Data
● Gathering the primary or secondary data
○ Quantitative
■ Experiments, clinical trials, observing and
recording events, and administering surveys with
closed-end questions
○ Qualitative
■ In-depth interviews, observation methods, and
document reviews

47. International Market Research 7 of 7
47
Analyzing and Interpreting the Research
● Requires statistical and cultural knowledge
○ Software for quantitative analysis
○ Understanding of values, beliefs, norms, and artifacts of
the respondent
● Reporting the Research Findings
○ May include information on customers, competitors,
countries, the industry, and the environment

48. Learning Objective 18-7 Describe how globalization is affecting product development.
New product success is a product of:
▪ International marketing
▪ R&D
▪ Manufacturing
▪ Technological innovation
▫ Creative destruction
48
Product Development 1 of 5

49. Product Development 2 of 5 49
The Location of R&D
● Rate of new-product development is greatest in countries
where:
○ More money is spent on basic and applied research and
development
○ Underlying demand is strong
○ Consumers are affluent
○ Competition is intense
● U.S. is no longer the lead market.

50. Product Development 3 of 5
50
Integrating R&D, Marketing, and Production
● New-product development has a high failure rate.
○ Development of a technology for which demand is
limited
○ Failure to adequately commercialize promising
technology
○ Inability to manufacture a new product cost effectively
● Integrating R&D, production, and marketing can help a
company ensure that:
○ Product development projects are driven by customer
needs.
○ New products are designed for ease of manufacture.
○ Development costs are kept in check.
○ Time to market is minimized.

51. Product Development 4 of 5 51
Cross-Functional Teams
● Objective: take a product development project from the
initial concept development to market introduction
○ Project manager
○ At least one member from each key function
○ Physically in one location if possible
○ Clear plan and goals
○ Processes for communication and conflict resolution

52. Product Development 5 of 5
Building Global R&D Capabilities
▪ Commercialization may require different versions of a new
product to be produced for various countries.
▪ Global networks of R&D centers
52

53. Appendix of
Image Long
Descriptions
53

54. From a manufacturer inside the country, goods flow to a wholesale
distributor, a retail distributor, and the final customer.
From a manufacturer outside the country, goods flow to a retail
distributor and the final customer; but they may also go first to an
import agent who sends them to a wholesale distributor, a retail
distributor, and the final customer.
54
Appendix 1 Figure 18.1 A typical distribution
system