Developing and Developing and Marketing Marketing ProductsProducts

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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

14 - 2Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Globalization and MarketingGlobalization and Marketing

Standardized productand promotion

Adapted productand/or marketing

• Consistent image/message

• Contain costs

• Consistent image/message

• Contain costs

• Respond to local needs

• Exploit unique image

• Respond to local needs

• Exploit unique image

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Culturaldifferences

Laws andregulations

Nationalimage

Counterfeitgoods

National Business National Business EnvironmentsEnvironments

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Brand and Product NamesBrand and Product Names

Brand name

Competitive advantage Consistent image Consider connotation

Product name

Select carefully Respect cultures Obey local laws

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Product Life CyclesProduct Life Cycles

New product development efforts

Result is shorter product life cycles

New product development efforts

Result is shorter product life cycles

Consecutive market introductions

Technology and travel make obsolete

Consecutive market introductions

Technology and travel make obsolete

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Push and Pull StrategiesPush and Pull Strategies

Push Strategy Pull Strategy

Pressure channel members to carry aproduct and promote it to final users

Create buyer demand that will encourage channel members to stock a product

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Choosing Push or PullChoosing Push or Pull

Powerful channel members make push difficult

Fewer media outlets in emerging markets makes pull difficult

Brand loyalty makes pull easier

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International AdvertisingInternational Advertising

Standardize wherepossible

Lessons from theEuropean Union

Consider culturalnuances

Exploit globaladvertising outlets

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Marketing CommunicationsMarketing Communications

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Communication Strategy 1Communication Strategy 1

Extend product and communications

Simple andprofitable

Simple andprofitable

LuxurygoodsLuxurygoods

GlobalstrategyGlobal

strategy

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Communication Strategy 2Communication Strategy 2

Extend product / adapt communications

Differentbuyer, need, or function

Differentbuyer, need, or function

Level ofeconomic

development

Level ofeconomic

development

Can helpcontaincosts

Can helpcontaincosts

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Communication Strategy 3Communication Strategy 3

Adapt product / extend communications

Localcontent

laws

Localcontent

laws

Can beexpensive

Can beexpensive

Safety codes,infrastructureSafety codes,infrastructure

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Communication Strategy 4Communication Strategy 4

Adapt product and communications

Satisfypreferences

or needs

Satisfypreferences

or needs

Needs large,profitablesegment

Needs large,profitablesegment

Explainproductbenefits

Explainproductbenefits

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Communication Strategy 5Communication Strategy 5

Product invention

Lowpurchasing

power

Lowpurchasing

power

Level ofeconomic

development

Level ofeconomic

development

Differentinfrastructure

Differentinfrastructure

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Distribution StrategyDistribution Strategy

Planning, implementing, and controlling the physicalflow of a product from origin to consumption

Physical goods

Consulting services

News providers

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Distribution ChannelsDistribution Channels

Cost implications

Number ofintermediaries

Channel length

Intensive channel• Many resellers

Exclusive channel• One / few resellers

Degree of exposure

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Product CharacteristicsProduct Characteristics

ValuedensityValue

density

Product’s value relativeto its weight and volumeProduct’s value relativeto its weight and volume

The lower a product’s valuedensity, the more localizedis its distribution system

The lower a product’s valuedensity, the more localizedis its distribution system

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Distribution ProblemsDistribution Problems

Financial loss Financial loss

Strategic impact Strategic impact

Lack of market understanding

Lack of market understanding

Theft and corruption

Theft and corruption

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Pricing StrategyPricing Strategy

Must match overall firm strategy

• Low-cost leadership

• Differentiation

• Focus

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Worldwide PricingWorldwide Pricing

Single selling price for all international markets

Difficulties

• Local production cost• Export / distribution cost• Local purchasing power• Exchange rates

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Dual PricingDual Pricing

Different selling price abroad than at home• Price escalation

• Lower local price

Separate international from domestic buyers• If not, arbitrage possible

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Pricing IssuesPricing Issues

Intra-company transfer

Free-market price

Upper or lower limits

Unfairly low export price

Transfer price

Arm’s length price

Price controls

Dumping