Chapter 14 Developing and Marketing Products

International Business 4e 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, 2008 International Business 4e

Globalization and Marketing Standardized product and promotion Adapted product and/or marketing Consistent image and message Contain costs Respond well to local needs Obey local laws © Prentice Hall, 2008 International Business 4e

National Business Environments Cultural differences Laws and regulations National image Counterfeit goods © Prentice Hall, 2008 International Business 4e

Brand and Product Names Brand name Competitive advantage Consistent image Consider connotation Product name Select carefully Respect cultures Obey local laws © Prentice Hall, 2008 International Business 4e

Product Life Cycles Consecutive market introductions Technology and travel make obsolete New-product development efforts Result is shorter product life cycles © Prentice Hall, 2008 International Business 4e

Push and Pull Strategies Push Strategy Pull Strategy Pressure channel members to carry a product and promote it to final users Create buyer demand that will encourage channel members to stock a product © Prentice Hall, 2008 International Business 4e

members make push difficult 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, 2008 International Business 4e

Global Sales Force Management Research local customer base Obtain feedback from salespeople Adapt to local compensation Adjust to local motivation tactics © Prentice Hall, 2008 International Business 4e

Marketing Communications © Prentice Hall, 2008 International Business 4e

Communication Strategy I Extend product and communications Simple and profitable Global consumer goods Luxury items © Prentice Hall, 2008 International Business 4e

Communication Strategy II Extend product / adapt communications Satisfies different need Appeals to different buyer Serves different function © Prentice Hall, 2008 International Business 4e

Communication Strategy III Adapt product / extend communications Local infrastructure Local content laws Can be costly © Prentice Hall, 2008 International Business 4e

Communication Strategy IV Adapt product and communications Rather uncommon Can be expensive Requires large profitable segment © Prentice Hall, 2008 International Business 4e

Communication Strategy V Product invention Purchasing power Economic development level Varying infrastructure © Prentice Hall, 2008 International Business 4e

Distribution Strategy Planning, implementing, and controlling the physical flow of a product from origin to consumption Physical goods Consulting services News providers © Prentice Hall, 2008 International Business 4e

Distribution Channels Intensive channel Many resellers Exclusive channel One / few resellers Degree of exposure Cost implications Number of intermediaries Channel length © Prentice Hall, 2008 International Business 4e

Product Characteristics Product’s value relative to its weight and volume The lower a product’s value density, the more localized is its distribution system Value density © Prentice Hall, 2008 International Business 4e

Distribution Problems Lack of market understanding Theft and corruption Financial loss Strategic impact © Prentice Hall, 2008 International Business 4e

Must match overall firm strategy International Business 4e Pricing Strategy Must match overall firm strategy Low-cost leadership Differentiation Focus © Prentice Hall, 2008 International Business 4e

Worldwide Pricing Difficulties Single selling price for all international markets Difficulties Local production cost Export, distribution cost Local purchasing power Exchange rates © Prentice Hall, 2008 International Business 4e

International Business 4e 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, 2008 International Business 4e

International Business 4e Pricing Issues Transfer price Arm’s length price Price controls Dumping Intra-company transfer Free-market price Upper or lower limits Unfairly-low export price © Prentice Hall, 2008 International Business 4e

International Business 4e Chapter Review 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, 2008 International Business 4e