Developing and Marketing Products

International Business 3e Chapter Preview Explain the key considerations in choosing international product strategies Identify the five international communication strategies Describe each element that impacts international distribution strategies Identify various international pricing strategies and the factors that influence selection © Prentice Hall, 2006 International Business 3e

Globalization and Marketing Standardized product and promotion Consistent image and message Contain costs Adapted product and/or marketing Respond well to local needs Obey local laws © Prentice Hall, 2006 International Business 3e

National Business Environments Cultural differences Laws and regulations National image Counterfeit goods © Prentice Hall, 2006 International Business 3e

Brand and Product Names Brand name Competitive advantage Consistent image Consider connotation Product name Select carefully Respect cultures Obey local laws © Prentice Hall, 2006 International Business 3e

International Business 3e Product Life Cycles Consecutive market introductions Technology and travel make obsolete New-product development efforts Result is shorter product life cycles © Prentice Hall, 2006 International Business 3e

Push and Pull Strategies Push Strategy Pressure channel members to carry a product and promote it to final users Pull Strategy Create buyer demand that will encourage channel members to stock a product © Prentice Hall, 2006 International Business 3e

International Business 3e Choosing Push or Pull Powerful channel members make push difficult Fewer media outlets in emerging markets makes pull difficult Brand loyalty makes pull easier © Prentice Hall, 2006 International Business 3e

Global Sales Force Management Adapt to local compensation Research local customer base Adjust to local motivation tactics Obtain feedback from salespeople © Prentice Hall, 2006 International Business 3e

Communication Strategy I Extend product and communications Simple and profitable Luxury items Global consumer goods © Prentice Hall, 2006 International Business 3e

Communication Strategy II Extend product / adapt communication Satisfies different need Serves different function Appeals to different buyer © Prentice Hall, 2006 International Business 3e

Communication Strategy III Adapt product / extend communication Local infrastructure Local content laws Can be costly © Prentice Hall, 2006 International Business 3e

Communication Strategy IV Adapt product and communications Rather uncommon Can be expensive Requires large profitable segment © Prentice Hall, 2006 International Business 3e

Communication Strategy V Product invention Purchasing power Economic development level Varying infrastructure © Prentice Hall, 2006 International Business 3e

Distribution Strategy Planning, implementing, and controlling the physical flow of a product from origin to consumption Physical goods Consulting services News providers © Prentice Hall, 2006 International Business 3e

Distribution Channels Degree of exposure Exclusive channel One / few resellers Intensive channel Many resellers Channel length Number of intermediaries Cost implications © Prentice Hall, 2006 International Business 3e

Product Characteristics Value density Product’s value relative to its weight and volume The lower a product’s value density, he more localized is its distribution system © Prentice Hall, 2006 International Business 3e

Distribution Problems Lack of market understanding Theft and corruption Both result in: Financial loss Strategic impact © Prentice Hall, 2006 International Business 3e

International Business 3e Pricing strategy Must match overall firm strategy Low-cost leadership Differentiation Focus © Prentice Hall, 2006 International Business 3e

International Business 3e Worldwide Pricing Single selling price for all international markets Difficulties Local production cost Export and distribution cost Local purchasing power Exchange rates © Prentice Hall, 2006 International Business 3e

International Business 3e Dual Pricing Different selling price abroad than at home Price escalation Lower local price Separate international from domestic buyers If not, arbitrage possible © Prentice Hall, 2006 International Business 3e

International Business 3e Pricing Issues Transfer price Intra-company transfer Arm’s length price Free-market price Price controls Upper or lower limits Dumping Unfairly-low export price © Prentice Hall, 2006 International Business 3e