International marketing

1. INTERNATIONAL MARKETING
Recommended Book:- Cateora and Graham

2. PGDM (IIM Raipur)
Bakhresa FMCG (South Africa)
Relationship Manager (HDFC Bank)
MD- Shyam Hospital
Faculty(MBA)- GLA University, Mathura
Swarit Yadav

3. Topics to be covered
 Product policy and planning
 Product design and standardization
 Developing an international product line
 Foreign product diversification
 International branding decisions
 International packaging
 International warranties and services

4. Designing
the marketing programme
 Once the firm has decided how it will enter the
international market, the next issue is how to
desigh the international/global marketing mix.
 There are different forces in the international
environment that may favour either increasing
globalization or increasing adaptation of the firm.
 Supporters of adaptation state that there are
substantial differences between countries and
even between regions in the same countries.

5. Designing
the marketing programme
It is relevant to discuss
degree of standardization
or so called
„standardization potential profile“

6. Main decisions
in product policy
 What kind of product?
 Product life cycle
 New product development and innovations
As a product we can consider anything what
can be offered to our customer.

7. Which products for
international markets?
 The same as for home market
 Adapted products
 Standardized products
 New products
Define the reasons
for each option!

8. Factors of adaptation
 Consumer goods for
daily use
 Local competition

9. Factors of adaptation
 Different conditions of
use
 Intercultural differencies
in consumer behaviour
and purchasing
behaviour
 Differences in purchasing
power
 Different conditions in
supplying with
production inputs
 Different legislation

10. Factors
of standardization
 Economics of scale
 High costs of adaptation
process
 Industrial and high tech
products
 Entering the similar
markets
 Export
 Global competition
 Strong image of the
country/producer/brand

12. 14-12
Branding decisions
Source: Source: adapted from Onkvisit and Shaw, 1993, p. 534.

13. Benefits of strong brand in
local/regional market
 New product in
brand portfolio
 Repositioning the
traditional product
 Seasonal product for
larger market
 Brand partnership

14.  In international markets, success depends on satisfying
the market demands. The product or service must be
suitable and acceptable for its purpose.
 According to Doole & Lowe (1999, p.296),
“The main issue for a company about to commence
marketing internationally, is to assess the suitability of
the existing products for international markets.”
 Product policy abroad: firm must decide which aspects of
a product need to be adapted and which can be
standardised.
Standardisation Vs Adaptation

15.  Standardisation policy: offering a uniform version of a
product in all of its foreign markets.
 Adaptation policy: offering a product to targeted foreign
consumers altered to specific tastes, preferences and
needs. Adaptation can concern all the characteristics of
the product.
 Decision between standardisation and adaptation is not
mutually exclusive rather it is a matter of degree
 A certain degree of adaptation of a product is required in
international markets.
Standardardisation Vs Adaptation

16. International Product Strategies
Straight
Extension
Product Product
Adaptation Innovation
The firm adopts
the same policy
used in its home
market.
The company caters
to the needs and wants
of its foreign customers.
The firm designs a
product from scratch
for foreign customers.
Source: W.J. Keegan, Multinational Product Planning: Strategic Alternatives,
Journal of Marketing, 33, 1969, pp.58-62

17. These Three Basic Strategies Can Be Further
Broken Down Into 5 Options
International
Product Strategy
Product
Example
Consumer Need
Satisfied
Product Strategy Communication Strategy
Strategy 1
Product and
Communication
Extension
Gillette
Razor
Disposable, easy to use
product
Extension Extension
Strategy 2
Product Extension
Communication
Adaptation
Wrigley
Chewing Gum
USA: Substitute for
Smoking
Europe: Dental benefits
Extension Adaptation
Strategy 3
Product Adaptation
Communication
Extension
McDonalds Fast-Food Adaptation:
Adding local products to
range
Extension:
Using global campaign
Strategy 4
Product and
Communication
Adaptation
Slim Fast Identical:
Lose Weight
Adaptation:
Consumer preferences
for different flavors
Adaptation:
Celebrity in Germany,
Teacher in UK
Strategy 5
Product Invention Buckler Beer Non-alcoholic beer Invention Develop new
communication
Source: W.J. Keegan

18. Adaptation
Mandatory Product Adaptation
 Government regulations
 Electrical current
standards
 Measurement systems
 Operating systems
Optional Product Adaptation
 Physical distribution
 Local use conditions
 Climatic conditions
 Space constraint
 Consumer demographics as
related to physical appearance
 User's habits
 Environmental characteristics
 Price
 Limiting product movement
across national borders (gray
marketing)
 Historical preference or local
customs and culture

19. International Product Strategies
 Standardized Product
- Domestic product introduced internationally, with minor or no
modification
 Localized Product
- Domestic product adapted for foreign markets
- Product designed specifically for foreign markets
 Global Product
- Product designed with international (not national) markets in
mind
- Product having universal features
- Product being adaptation-ready, when necessary

20. Country-of-Origin Effects
 Impact of where the product is manufactured
 perceived quality?
 patriotism/nationalism?
 Country-of-origin versus country-of-manufacture
 Interaction of country-of-origin and brand name effects
 Hybrid products (e.g., components manufactured in multiple countries; products via
strategic alliances)
 “…any influence that the country of manufacture, assembly, or design has on a
consumers positive or negative perception of a product” (Cateora & Graham, 2002,
p.369)
 Stereotypes – positive or negative
 Significant influence on product positioning
 Adapt positioning from country to country

21. Regional,
Country, or Local
Characteristics
Product
Characteristics
Company
Considerations
Decision to Alter the Domestic Product
Factors Affecting Adaptation
Source: Adapted from V. Yorio, Adapting Products for Export (New
York: Conference Board, 1983), 7. Reprinted with permission.

22. 22
Considerations in adapting products
Target Market
Macro-
environment
Government
Regulations
Competition
 Who buys
the product?
 Who uses
the product?
 How is it
used?
 Where/ why/
when is it
bought?
 Geography
 Climate
 Economic
 Socio-
cultural
 Political/
legal
 Tariffs
 Labeling
 Patents/
trademarks
 Taxes
 Other
 Price
 Performance
 Design or
style
 Patent
protection
 Brand name
 Package
 Services

23. The Market Environment
 Government Regulations
 Political and social agendas often dictate regulatory requirements
 Nontariff Barriers
 Product standards, testing, subsidized local products
 Customer Characteristics, Expectations, and Preferences
 Physical size, local behaviors, tastes, attitudes, and traditions
 Consumption patterns, psychosocial characteristics, and general
cultural criteria

24. The Market Environment
 Economic Development
 The stage of economic development affects the market size and
demand characteristics. Backward innovation of the product may
be required to meet local requirements.
 Competitive offerings
 Monitoring competing local products is critical in adjusting the
product for competitive advantage.
 Climate and geography
 Local climatic conditions and terrain features can make products
vulnerable to damage.

25. What should be the product’s…
 Physical attributes?
 Size, design, materials, weight, color, etc.
 Package attributes?
 Protection, color, design, brand, etc.
 Service attributes?
 Use instructions, installation, warranties,
repair/maintenance, spare parts, etc.
 Expected profit contribution of each
adaptation?

26. Convergence of Car Sizes

27. Product Characteristics
 Product Constituents
 Branding
 Packaging
 Appearance
 Method of Operation or Usage
 Quality
 Service
 Country-of-Origin Effects

28. Protecting International Brand Names and
Trademarks
 The firm must evaluate each market / brand whether
to seek protection.
(Blue Bell Inc. - trademark Wrangler registered in
135 countries)
 Global brands versus national brands :
Priority in Use <-> Priority in Registration
(Ford Mustang in Germany renamed Taunus)
 Brand piracy : local imitation or deliberate
registration

29. Family Brands
Family Brand
Volkswagen
USA Europe Mexico
"Rabbit" "Golf" "Caribe"
-> lightness -> prestige -> avoid negative
connotation
http://www.vw.com/

30. Product Packaging and Labeling
Protection
Legal ConstraintsPromotion
Climate
Transport & Handling
Buyer's slow usage rate
Lack of storage facilites
Merchandising ( income level, shopping habits)
Minimum breakage / theft
Ease of handling
Multilingual Labels to Convey an International
Image (Zara, Hollywood Chewing Gum)
Recycling of Packaging
(Duales System, Eco-Emballage)
Regulations on consumer info.
(Origin, weight, ingredients)
http://www.pg.com/company/who_we_are/global_products.shtml

31. International packaging and European
Packaging Trends
 Transportation Concerns
 Climate Concerns
 Economic Concerns
 Cultural Factors
 Promotional Considerations
 Market Retailing Structure
 Labelling

32. Company Considerations
 Organizational capabilities?
 Is it worth it?
 Can we afford not to do it?
 Can a specific return-on-investment (ROI) be
attained?
 Quality, price, and user perceptions?
 Warranties?
 Managerial talent?

33. 33
Strategic Competitive Outcomes
 International diversification: A strategy through
which a firm expands the sale of its goods or services
across the borders of global regions and countries into
different geographic locations or markets
 Strategic Competitive Outcomes
 International diversification and returns
 As international diversification increases, firms’ returns initially
decrease, but then increase quickly as firm learns to manage
international expansion
 Firms that are broadly diversified into multiple international
markets usually achieve the most positive stock returns

34. 34
Strategic Competitive Outcomes
 Strategic Competitive Outcomes (cont.)
 International diversification and innovation
 Potential to achieve greater returns on innovations while
reducing risks of R&D investments
 Exposure to new products and processes and the
opportunity to integrate this new knowledge into operations
 Provides incentives to innovate
 Competitive advantage potential
 Locating activities
 Transferring competencies
 Coordinating activities
 Profit sanctuaries and cross market subsidization

35. 10-
35
Brands
 Bundle of images and experiences in the
customer’s mind
 A promise made by a particular company about
a particular product
 A quality certification
 Differentiation between competing products
 The sum of impressions about a brand is the
brand image

36. 10-
36
Brand Equity
 The added value that accrues to a product as
a result of investments in the marketing of the
brand
 An asset that represents the value created by
the relationship between the brand and
customer over time

37. 10-
37
Local Products and Brands
 Brands that have achieved success in a single
national market
 Represent the lifeblood of domestic companies
 Entrenched local products/brands can be a
significant competitive hurdle to global
companies

38. 10-
38
International Products and Brands
 Offered in several
markets in a
particular region
 Euro brands
The Smart car was developed by
DaimlerChrysler for the European
market.

39. 10-
39
Global Products and Brands
 Global products meet the wants and needs of
a global market and are offered in all world
regions
 Global brands have the same name and
similar image and positioning throughout the
world

40. 10-
40
Global Brand Characteristics
 Quality signal—allows a company to charge a
premium price in a highly competitive market
 Global myth—marketers can use global
consumer culture positioning to link the brand
identity to any part of the world
 Social responsibility—shows how a company
addresses social problems

41. 10-41
Global Products and Brands
 Global brands are
not the same as
global products
 iPod = brand
 Mp3 player=
product

42. 10-
42
Branding Strategies
 Combination or tiered branding allows
marketers to leverage a company’s reputation
while developing a distinctive identity for a line
of products
 Sony Walkman
 Co-branding features two or more company or
product brands
 NutraSweet and Coca-Cola
 Intel Inside

43. 10-
43
Brand Extension
 Brand acts as an umbrella for new products
 Ex: The Virgin Group
 Virgin Entertainment: Virgin Mega-stores and MGM Cinemas
 Virgin Trading: Virgin Cola and Virgin Vodka
 Virgin Radio
 Virgin Media Group: Virgin Publishing, Virgin Television, Virgin
Net
 Virgin Hotels
 Virgin Travel Group: Virgin Atlantic Airways, Virgin Holidays

44. 10-
44
Global Brand Development
 Questions to ask when management seeks to
build a global brand
 Does this move fit the company and/or its markets?
 Will anticipated scale economies materialize?
 How difficult will it be to develop a global brand
team?
 Can a single brand be imposed on all markets
successfully?

45. 10-
45
Global Brand Development
 Global brand leadership
 Using organizational structures, processes, and
cultures to allocate brand-building resources
globally, to create global synergies, and to
develop a global brand strategy that coordinates
and leverages country brand strategies

46. 10-
46
Global Brand Development
 Create a compelling value proposition
 Think about all elements of brand identity and
select names, marks, and symbols that have the
potential for globalization
 Research the alternatives of extending a
national brand versus adopting a new brand
identity globally
 Develop a company-wide communication system

47. 10-
47
Global Brand Development
 Develop a consistent planning process
 Assign specific responsibility for managing
branding issues
 Execute brand-building strategies
 Harmonize, unravel confusion, and eliminate
complexity

48. 10-
48
Packaging
 Consumer packaged goods refers to products
whose packaging is designed to protect or
contain the product during shipping, at retail, or
point of use
 Eco-packaging is key because package
designers must address environmental issues
 Offers communication cues that provide
consumers with a basis for making a purchase
decision

49. 10-
49
Labeling
 Provides consumers with various types of
information
 Regulations differ by country regarding various
products
 Health warnings on tobacco products
 American Automobile Labeling Act clarifies the
country of origin and final assembly point
 European Union requires labels on all food products
that include ingredients from genetically modified
crops

50. 10-
50
Aesthetics
 Global marketers must understand the
importance of visual aesthetics
 Aesthetic styles (degree of complexity found
on a label) differ around the world
 Aesthetic elements that are deemed
appropriate, attractive, and appealing in
one’s home country may be perceived
differently elsewhere.

51.  Red: South Africa = mourning; India =
purity; China = celebration, good luck;
Russia = Bolsheviks, communism; Western
= excitement
 Yellow: China = nourishing; Egypt =
mourning; India = merchants; Western =
hazard, warning, hope
10-
51

52.  Green: China = exorcism; India = Islam;
Ireland = the country; Western = Spring,
rebirth, go, ecology
 Blue: Iran = heaven and spirituality;
Western = depression, sadness, “something
blue” bridal tradition, conservative
 Purple: Thailand = mourning; Western =
royalty
10-
52

53. White: Japan white carnation = death; Eastern
= funerals; Western = brides, angels, good
guys, hospitals, doctors, peace
10-
53

54. 10-
54
Product Warranties
 Express warranty is a written guarantee that
assures the buyer is getting what he or she
paid for or provides a remedy in case of a
product failure
 Warranties can be used as a competitive tool