©2004 Prentice Hall16-1 Marketing Process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individuals and organizational objectives

©2004 Prentice Hall16-2 Marketing Mix  How to develop the firm’s products  How to price those products  How to sell those products  How to distribute those products to the firm’s customers  Who is the Target Market?

©2004 Prentice Hall16-3 The Elements of the Marketing Mix for International Firms ProductPlacePromotionPricing Marketing Mix

©2004 Prentice Hall16-4 Key Decision-Making Factors  Standardization versus customization  Legal forces  Economic factors  Changing exchange rates  Target customers  Cultural influences  Competition

©2004 Prentice Hall16-5 Standardization versus Customization  Should the firm adopt an ethnocentric approach?  Should it adopt a polycentric approach?  Should it adopt a geocentric approach?

©2004 Prentice Hall16-6 Standardized International Marketing Advantages  Reduces marketing costs  Facilitates centralized control of marketing  Promotes efficiency in R&D  Results in economies of scale in production  Reflects the trend toward a single global marketplace Disadvantages  Ignores different conditions of product use  Ignores local legal differences  Ignores differences in buyer behavior patterns  Inhibits local marketing initiatives  Ignores other differences in individual markets

©2004 Prentice Hall16-7 Customized International Marketing Advantages  Reflects different conditions of product use  Acknowledges local legal differences  Accounts for differences in buyer behavior patterns  Promotes local marketing initiatives  Accounts for other differences in individual markets Disadvantages  Increases marketing costs  Inhibits centralized control of marketing  Creates inefficiency in R&D  Reduces economies of scale in production  Ignores the trend toward a single global marketplace

©2004 Prentice Hall16-8 Product Life Cycle IntroGrowthMaturityDecline Profit Sales

©2004 Prentice Hall16-9 Break Even Analysis Units $ Cost Curve = Fixed Costs + Variable Costs Total Revenue Curve = Selling Price X Units BE = Total Fixed Costs/Price – Variable Costs

©2004 Prentice Hall16-10 Pricing Policies  Standard price policy  Two-tiered pricing  Market pricing

©2004 Prentice Hall16-11 Conditions for Market Pricing  Firm must face different demand and/or cost conditions in the countries in which it sells its products  Firm must be able to prevent arbitrage

©2004 Prentice Hall16-12 Risks to Market Pricing  Complaints about dumping  Damage to its brand name  Development of a gray market for its products  Consumer resentment against discriminatory prices

©2004 Prentice Hall16-13 Promotion Mix  Advertising  Personal Selling  Sales Promotion  Public Relations

©2004 Prentice Hall16-14 Factors affecting Advertising Strategy  The message it wants to convey  The media available for conveying the message  The extent to which the firm wants to globalize its advertising effort

©2004 Prentice Hall16-15 Advantages of Personal Selling for International Firms  Local sales representatives understand local culture, norms, and customs  Personal selling promotes close, personal contact with customers  Personal selling makes it easier for firm to adopt valuable market information

©2004 Prentice Hall16-16 Distribution Issues  Physically transporting its goods and services from where they are created to the various markets in which they are to be sold  Selecting the means by which to merchandise its good in the markets it wants to serve

©2004 Prentice Hall16-17 Basic Parts of a Distribution Channel  The manufacturer  A wholesaler  The retailer  The actual customer

©2004 Prentice Hall16-18 Distribution Channel Options

©2004 Prentice Hall16-19 Using E-Commerce and disintermediation.